Life sciences industry boosts office market activity in Q2

Office leasing gained ground in the second quarter, generating 2.8 million square feet of business, according to Necklaces, a 13.8% increase over the three-year pre-pandemic quarterly average. Meanwhile, at 22.2%, the industry’s overall availability rate was down slightly from the first quarter of 2022 and year-over-year.

New Jersey Q2 Office market overview

rental activity

North – 1,173,730
Central – 1,649,040
Globally – 2,822,770

Rate of availability

North – 23.0%
Central – 21.0%
Globally – 22.2%

Average asking rent
($PSF/year.)

North – $30.94
Central – $26.67
Globally – $29.32

In its snapshot of the New Jersey office market for the second quarter of 2022, Colliers said the drop in availability — just the second drop since COVID hit — came thanks to larger transactions. And a number of those bigger deals have been in the life sciences space.

According to Felix Soto, head of research at Colliers, the life sciences sector was the main driver of leasing activity last quarter. Fueling that industry momentum — and helping carve out a 28% share of the business — in an email to NJBIZ Soto cited two transactions: Cellares’ new lease for 118,208 square feet of space at 95 Corporate Drive in Bridgewater and the move of PTC Therapeutics to Somerset County.

The PTC deal is the most significant identified in the Colliers report. A joint venture of Rubenstein Partners LP and Vision Real Estate Partners announced the long-term lease in June, under which the pharmaceutical company will occupy a new facility of more than 360,000 square feet at the Warren Corporate Campus. The new headquarters – PTC is currently based in South Plainfield – will span two full buildings and will include offices, collaboration and conference spaces, and research labs.

When the deal was announced, Therapeutic PTC Vice President of Global Facilities Doug McLeester said the facility at 400 and 500 Warren Corporate Drive in Warren is “the ideal space for our planned future expansion into New Jersey, a fundamental and growing market for biotechnology in the United States”. company – and others like it – are moving in and around Garden State, McLeester said the new space “allows us to have a class-A facility for our growing team, while keeping the new paradigm of flexible working As PTC grows to become one of the world’s leading rare disease companies, our internal capabilities must also grow and adapt.

Building 500 at the Warren Corporate Center in Somerset County. – RUBENSTEIN PARTNERS

According to Colliers, new leases such as those signed by Cellares and PTC drove demand in the office sector, while renewals accounted for 19.2% of all lease transactions. The largest renewal, for 57,405 square feet at 111 Wood Ave. S. in Iselin, was for a manufacturer that serves the life science industry, Ansell Healthcare Products.

Other notable life science lease transactions identified by Colliers from the second quarter include:

  • Gilead Sciences‘ Lease of +96,392 square feet at 369 Interpace Parkway in Parsippany
  • Kyowathe +78,464 square foot lease at 510 Carnegie Center in Princeton, and
  • Repligen Corp.Renewal and expansion of +57,485 square feet at 685 Route 202/206 in Bridgewater.

As for where life science companies are looking to locate, Soto noted that “demand continues to be strong in central New Jersey,” adding that “industry is helping to kick-start office buildings underutilized”.

The Colliers report also identified an appetite for newly built plug-and-play spaces amid high and rising construction costs as a trend that has continued since the first quarter of the year. . One example highlighted by the company was biopharmaceutical company Aadi Bioscience’s sublease of 10,615 square feet of space at 2 Speedwell Ave. in Morristown.

While this is good news for life sciences and although there was an improvement in the office market as a whole in the second quarter – net uptake was positive again for the second time in three quarters to 601,774 square feet – the Colliers report pointed to the return of greater concentrations of space to supply, particularly in North Jersey, as further picking up the positive momentum. Rents also rose to $29.32 per square foot, a 1.4% year-over-year increase. Colliers attributed the increase to the upward revision of recently updated building prices in transit-focused submarkets.

Looking ahead, Soto said Colliers “expects[s] Life sciences will continue to be a driving force in the state for the foreseeable future as there are still plenty of tenants in the market. »

Jose C. Birney