NJ life sciences sector records vacancy drop in Q4

New Jersey’s life sciences sector closed 2022 on a high note, according to a new report from CBRE, posting a vacancy rate at year-end that marked a drop from the prior period.

During the fourth quarter, New Jersey’s vacancy rate for lab/R&D space came in at 7.4%, down from the third quarter’s 8.1%. And CBRE’s Q4 2022 Life Sciences Figures indicate that trend is poised to continue its decline as strong demand and a lack of supply persist within the market.

The firm pegs the amount of available suburban Class A lab/R&D space in the region at 400,000 square feet – with no significant new construction underway. Meanwhile, CBRE said, six major tenants are seeking space.

Nationally, CBRE reported that lab space under construction was up, hitting 40.3 million square feet in Q4 and up about 8% over Q3. Across the 13 largest life sciences markets, N.J. was the only one that had no square footage under construction. With 15.8 million square feet of existing lab space, the state was fourth in those terms.

The average vacancy in the sector nationwide came in at 5.7% for Q4, reflecting an increase from 5.1% in Q3, yet even with the year before and still under pre-2021 levels.

For the full year, the Garden State saw positive net absorption of 97,692 square feet in the sector, according to the report.

CBRE Executive Vice President Thomas Sullivan said New Jersey attracts tenants looking for the most advanced lab space in the region. “Venture capital funding also remained strong throughout the year, reaching $400 million,” he added in a statement.

When it comes to rents, figures in the local metro area were up by $4 to $32 per square foot — under the record-highs seen nationally. CBRE reports that average asking rents rose to $62.16 per square foot in Q4, pegging the increase as likely due to new space coming online in other markets.

Celebrating the sector:

• BioNJ recognizes 30 years at anniversary dinner