Life Sciences Outlook. Chicago 2015

Transcription

1 Life Sciences Outlook Chicago 2015

2 Chicago With a population of 9.5 million, the Chicago metropolitan region benefits from a highly educated workforce and is home to two federal scientific research institutions. Chicago was recently ranked on Genetic Engineering and Biotechnology News list of Top 10 U.S. Biopharma Clusters and has hosted the annual BIO International Convention three times in less than a decade (2006, 2010 and 2013). Major lab supply: Clusters of established lab stock with long-time industry presence Emerging lab supply: Areas with limited lab stock today that are poised for growth Life Sciences manufacturing supply: Clusters of manufacturing space devoted to pharmaceutical, biological or medical device & instrument manufacturing Chicago overview Much of the life sciences industry in Chicago is dominated by publicly traded multinationals and the federal government. Several large corporate occupiers call the Chicago region home, including Baxter International and Abbott Labs. The federal government maintains a large presence in the area with two research sites in the region: Argonne National Laboratory in Woodridge and Fermi National Accelerator Laboratory in Batavia. In addition, Chicago is home to a number of world renowned academic institutions contributing to scientific research. According to the National Science Foundation, regional academic R&D expenditures approached $1.1 billion last year in life science disciplines alone. Notable hospitals in the area include Rush Medical, University of Chicago and Northwestern, which provide excellent testing grounds for innovative medical research. Emerging scientific users benefit from the region s various science-focused incubators, such as the Illinois Science & Tech Park and the Chicago Technical Park. The majority of established private sector users prefer to occupy owned facilities in suburban campus enclaves. As a result, their impact on the local leasing market is minimal, with the exception of spinoffs, temporary expansions and overflow space. Suburban North Shore R&D-heavy firms tend to gravitate to the Suburban North Shore stretching between Northern Cook County and Lake County. With more than 100 biotechnology/pharmaceutical companies, including 10 corporate headquarters, Lake County is at the heart of Chicago s life science cluster. These 100+ firms employ more than 19,000 people, or nearly 6.3 percent of the county s workforce. Lake County is home to five full-service hospitals, averaging 228 beds each, as well as to five ambulatory surgical centers. JLL Chicago Life Science Outlook

3 Economic scorecard Workforce Total life sciences % life sciences to private employment Year-overyear growth Employment 52, % 0.8% Establishments 1, % -0.5% Funding Total life sciences % to total U.S. VC funding % NIH funding $71.8M 0.3% Innovation Total life sciences % to all patent classes Patents % Cluster score: 27.5 Though in general this cluster is characterize by owneroccupied space, there are some notable exceptions. Companies such as Astellas, which completed a build-tosuit totaling over 410,000 square feet in 2012, and Abbot spinoff AbbVie, who signed one of metro Chicago s largest office leases in 2014 for 550,000 square feet in Mettawa, occupy significant amounts of the region s square footage. The life science sector employs over 52,000 people throughout the region. Lab occupations make up approximately half of sector employment with a median salary of $64,937 per year. The greatest share of employment is concentrated among a few pharmaceutical companies. Fifty-nine pharmaceutical firms, accounting for only 4.1 percent of life sector establishments, employ over 15,000 people. Life sciences employment composition 21.0% 7.0% 7.0% Life science payrolls 52, % 29.0% 15.0% non-lab using lab using Pharma & medicine manufacturing Electromedical instrument manufacturing Medical equipment & supplies manufacturing Testing laboratories Research & development Medical & diagnostic laboratories Life sciences patents by classification 45.0% 7.3% Medical equipment & instruments Life sciences patents % Pharmaceuticals & biotechnology Crop science In recent years, medical equipment and instruments have been the greatest source of life science innovation in the region, with the majority of sector share and record year of patent filings. Last year, AbbVie was among the top private companies across all sectors in terms of regional filings with 64 patents. Other notable life science innovators included Siemens Medical (38), Abbott Labs (37) and Baxter International (34). JLL Chicago Life Science Outlook

4 North Shore Lake County Highly educated and specialized labor is primary draw for life science tenants According to the Harvard Business School s Institute of Strategy and Competitiveness, the county is home to one of the highest concentrations of the biopharmaceutical industry in the nation. The life science sector employs 24,000 people in Lake County which constitutes almost half of total sector employment in Greater Chicago. Life science users occupy around 13.0 million square feet of real estate within the submarket, including 5.5 million square feet of lab/industrial space. Approximately 60.0 percent of these properties are owner occupied. Available lab space in the county is sparse, with just 113,000 square feet on market. Facilities scorecard Supply North Shore Metro Chicago Rentable lab stock (% of total stock) Direct vacancy (Change year-over-year) 1,502, % 5.6% +0.5% 3,355, % 5.0% +0.9% # of large blocks over 100,000 s.f Under construction (s.f.) 0 0 Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) (Change year-over-year) $ $ ,000 $ $0.63 North Cook County Proximity to the city s top-notch universities and world renowned medical community Evanston's Northwestern University, regarded among the nation s top medical research universities, represents the top academic contributor of life science research in Illinois, with $432 million in R&D expenditures in Five miles west in Skokie is the 23-acre Illinois Technology + Science Park, an R&D campus specifically designed to accommodate emerging bioscience, nanotechnology and medical device companies. Life science firms occupy 2.8 million square feet of real estate footprint across North Cook County, which includes 720,000 square feet of lab/industrial space. The submarket s vintage product is better suited to smaller requirements. Owner occupiers only account for 17.0 percent of life science users. There is currently 235,000 square feet of designated lab space available. Actavis 1342 Gregory Drive Antioch, IL 220,000 lease /454,000 RBA Class A: Bulk distribution Prelease of IDI new spec building BECO Innovation Park 600 N US Highway 45, Libertyville, IL Five-building, 1.2 m.s.f. former Motorola campus $50 million renovation for 4Q15 occupancy Baxalta 1200 Lakeside Drive Bannockburn, IL 257,191 s.f. Baxter spinoff new headquarters lease 10+ years Hospira th Avenue, Pleasant Prairie, WI 302,000 s.f. Class A Bulk distribution Lease restructure/early renewal Activity key: Leasing Sales Under construction Large blocks of space JLL Chicago Life Science Outlook

5 For more information, please contact: Amy Binstein Analyst, Research Chicago Paul Marsh Analyst, Research Chicago About JLL JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual fee revenue of $4.0 billion and gross revenue of $4.5 billion, JLL has more than 200 corporate offices, operates in 75 countries and has a global workforce of approximately 53,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.0 billion square feet, or million square meters, and completed $99.0 billion in sales, acquisitions and finance transactions in Its investment management business, LaSalle Investment Management, has $50.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit About JLL Research JLL s research team delivers intelligence, analysis and insight through market-leading reports and services that illuminate today s commercial real estate dynamics and identify tomorrow s challenges and opportunities. Our more than 400 global research professionals track and analyze economic and property trends and forecast future conditions in over 60 countries, producing unrivalled local and global perspectives. Our research and expertise, fueled by real-time information and innovative thinking around the world, creates a competitive advantage for our clients and drives successful strategies and optimal real estate decisions. This publication is the sole property of Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without prior written consent of Jones Lang LaSalle IP, Inc. COPYRIGHT JONES LANG LASALLE IP, INC. 2015