The Phoenix metro topped the nation for growth in life sciences employment between 2019 and 2020, according to a new CBRE Group Inc. study, and that employment growth has fueled a need for specialized real estate space that can accommodate lab and research uses.
Metro Phoenix’s life sciences employment grew 8.5%, between 2019 and 2020, the highest total job growth of all markets studied, according to the study. The metro ended the year with about 22,000 life sciences jobs.
David Barrett, first vice president for CBRE who specializes in tenant representation, said he has had seen an uptick in inquiries from life sciences-oriented companies looking at Phoenix in the past two years.
“I’ve seen Phoenix pop up more on the radar as an alternative to more traditional markets,” Barrett said, adding that there are a few tenants considering the market that would represent much larger investments in the life sciences in Phoenix than the Valley has traditionally seen.
Phoenix is still much smaller than the nation’s largest life sciences employment markets. According to CBRE, the San Francisco Bay Area tops the nation with about 129,000 life sciences related jobs, and the Boston-Cambridge metro has about 104,000. Comparable markets to Phoenix include the Denver-Boulder metro, which has about 25,000 and Indianapolis and Miami-Fort Lauderdale, which each have about 22,000.
The scope of “life sciences” employment covers a wide range of areas including research, biotechnology, therapeutics and other types of jobs.
Barrett said the Valley is now seeing the benefits of the work that was done decades ago to recruit the Translational Genomics Research Institute (TGen) to Phoenix.
“It created the right environment for it, but it maybe took a little longer than folks expected,” Barrett said. “We are seeing a change in mindset. There is the availability of labor, and a large cross-section of companies, Phoenix was kind of an untapped market.”
Phoenix has been put on the map for life sciences by a number of “lightning rod” investments, Barrett said. Those include TGen, the Phoenix Biomedical Campus, the Mayo Clinic and other major investments in the field, including the Wexford Science + Technology project in downtown Phoenix.
Some major life sciences companies to occupy space in the Valley recently include Align Technology, the maker of Invisalign, which moved its headquarters to Tempe and Sonora Quest Laboratories, which expanded its space in Tempe, Barrett said adding he is working with a “significant user” from the Midwest that would take up a large amount of lab space if they decide to lease in the Valley.
Looking into 2022, Barrett said he expects to see the growth continue, especially on the heels of large announcements like Mayo Clinic’s purchase of 228 acres adjacent to its north Phoenix campus and other large moves in the market.
“It’s exciting to be in the position I am now,” he said.