The life sciences side of commercial real estate has been a flourishing asset class for a number of years. The pandemic has only served to solidify its stronghold within the commercial real estate sector. According to Newmark’s “2021 Mid-Year Life Science Overview & Market Clusters” report, venture capital firms accelerated their investments in life science during the pandemic. Funding levels rose to a record $33.1 billion in 2020. Moreover, 2021 has seen a continuation of the record-setting pace, with venture capital funding reaching $26 billion in the first six months of this year.

Covid-19 ‘s impact means investors don’t have to be reminded of the serious importance of supporting infrastructure that bolsters crucial bio-innovation. Result: The life sciences sector is likely to witness robust growth for years.

For a look at life science real estate’s far-reaching impact, Forbes.com tracked down Lauren Gilchrist, managing director, research, at Longfellow Real Estate Partners, the largest privately-owned life science developer and manager in the U.S. Its 5-million-square-foot portfolio encompasses life science hubs in Cambridge, Boston, Raleigh-Durham, San Francisco and San Diego. Gilchrist fielded a number of questions from Forbes.com regarding life sciences clusters, addressing everything from life science as an economic generator to the increasing urbanization of life science clusters.

Strong ecosystems

In recent years, the cities listed above and other U.S. metros have vied to become life science capitals. That calls to question what exact factors help determine whether a city will become a life science nexus. Not all the answers are what you might expect.

“Life sciences companies thrive in strong ecosystems that include academic institutions, capital sources and dense clusters of scientific talent,” Gilchrist says,

“While scientific discovery historically occurred in far-flung research parks for the protection of intellectual property, today’s breakthroughs are occurring in innovation districts fostering collaboration, community and connectivity.

“Each of the regions [above] has its own unique flavor. But the biggest predictive factor for where a company will locate and grow is the home location of the founder or CEO. Certainly, some of these regions will compete against one another for specialized talent. But generally speaking, location choices are very sticky.”

The growing significance of life science developments results in them being nothing less than engines of economic growth. Gilchrist reports bioscience jobs have an economic multiplier effect of approximately three, meaning for every bioscience industry job generated, three additional jobs are born, according to an analysis performed by the Biotechnology Innovation Organization. “As a result, life science jobs have an impact on communities and economies that extend far beyond individual companies,” she added.

“Life science companies play a large role in the economic fabric of a region. The real estate developments they occupy play a key role in facilitating scientific advances. And in an economic climate where talent is everything, well-located, quality real estate can be the key to attracting and retaining scientific talent.”

Distant suburban campuses were once the geographic centers for scientific innovation, but they have given way to a preference for dense urban environments.

There, scientists of divergent backgrounds can coalesce to create next-generation innovations. Thus, the past two decades have seen the emergence of the cluster model in biomedical innovation districts within cities like San Francisco and Boston.

From a real estate perspective, this means an urban innovation district “feeling” must be created no matter where the campus is situated.

“In order to support, attract and retain high-quality talent, you need amenitization within the buildings where the innovation takes place,” she says. “Balancing state-of-the-art space with spaces [for] socializing and collaboration – cafes, restaurants, breweries, food trucks, outdoor common areas, etc. – is so important. These foster the interactions that drive innovation.”

Trends to come

What will the next five years deliver in terms of life science trends? “Colocation near research and health institutions, often in dense population centers, where companies gain access to patients and partners,” Gilchrist answers.

“We’re going to continue seeing this model ramp up in existing clusters on both coasts. A large part of the reason for that movement is the trend toward personalized medicine via gene and cell therapy — the hottest sector within life science right now — which requires access to patients and institutional collaborators. This will also reverberate to surrounding markets, likely leading to higher rents in areas around high-profile development areas.”