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Northwest
Life Science Report
q2 2022
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The Q2 2022 Northwest Life Science report includes data and analysis from Puget Sound, Sacramento, combined with Bay Area markets of the Peninsula, East Bay, San Francisco and Silicon Valley. Currently there is 56.3 million square feet of inventory across the seven markets. The largest cluster is the San Francisco Peninsula at 17.3 million square feet.
Market insights
Market Insights
There is currently 7.9 million square feet under construction in the Northwest, with the majority located in the largest market: San Francisco Peninsula. When under construction square footage is compared to current inventory, the resulting growth rate is 14.1% overall. Sacramento has taken the lead with the highest reported rate at 33.9%, with the San Francisco Peninsula close behind at 27.4%.
The San Francisco Peninsula reported the lowest vacancy rate at 4.5%, down from previous rates of 8.6% and 6.3% in Q2 2021 and Q4 2021, respectively. Silicon Valley reported the highest vacancy at 16.7%, followed by Portland with 13.0%. All Northwest markets reported availability rates of over 10% for the first time in three reporting cycles, mostly due to construction activity.
Sacramento and San Francisco Peninsula both have growth rates (under construction as a percentage of inventory) of over 25% and sub-10% vacancy rates. Silicon Valley has the highest vacancy rate in the region with renovations and conversions as the construction activity, not ground-up new construction.
The clusters of San Francisco Peninsula North and Puget Sound South Lake Union along with the market of San Francisco demand the highest asking rates within the region: over $70 per square foot NNN.
Leasing, Development & Capital Markets
There were 42 top leases reported totaling 1.8 million square feet. New leases accounted for 90% of the leasing activity in both count and square footage. The strong preference for new leases indicates market confidence similar to Q4 2021.
Grant funding from the National Institutes of Health (NIH) and private investment from venture capital sources is the backbone of the Life Science industry. Year-to-date, San Francisco has received $391 million in NIH grants.
Demand skyrocketed this report and construction commensurately increased. Life Science in the Northwest is poised for another banner year.
Market Fundamentals
Count of Top Sales
Total Sales ($)
Total SF of Sales
Price Per SF
Average Price
12
$1.5 Billion
2.1 Million
$718
$126 Million
There are currently 80 active requirements in the region totaling 5.3 million square feet, a 60% increase in total tenants and a 64.9% increase in total square footage from Q4 2021. Sacramento, Silicon Valley and the San Francisco Peninsula all saw demand increases from Q4 2021.
There were 12 top sales totaling $1.5 billion in total consideration, down slightly from Q4 2021. However, the price per square foot was $718 compared to $523 in Q4 2021. The average sale price was $126 million. The largest sale was the former Gap headquarters in San Francisco which sold to DivcoWest for $356 million.
Funding & Investments
Private and venture capital investment remains robust in the Bay Area, with San Francisco receiving the most year-to-date at over $4 billion.
Source: Colliers, Crunchbase
There are 32 projects currently under construction totaling 7.9 million square feet, with 9 projects breaking ground since Q4 2021. The pre-leased rate for the under construction projects is 37.7%. Four completed projects in Portland, Sacramento, and Puget Sound added new inventory.
Allyn Thorpe Senior Regional Analyst | USA Allyn.Thorpe@colliers.com
Jacob Pavlik, MRED | CPRC Research Manager | Pacific Northwest Jacob.Pavlik@colliers.com
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Copyright © 2022 Colliers The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
Source: Colliers
Note: Silicon Valley only has renovation/conversions for current activity.
Source: Colliers, NIH
Note: Silicon Valley is missing from this graph because the construction activity is renovations only.
Note: Sacramento, San Francisco, Silicon Valley and Portland all report as overall markets. The rest of the markets in the region report in clusters.
Note: Portland currently has no active life science-users in the market.
Note: * indicates a renewal transaction.
Note: Proposed includes includes entitled and planned projects. Silicon Valley only has renovation/conversions for current activity.
Development Pipeline
Largest Five Q2 2022 Leases
Puget Sound
Portland
Silicon Valley
SF Peninsula
SAN FRANCISCO
EAST BAY
SACRAMENTO
CALIFORNIA
Oregon
Washington
Click to view Market Insights
Below are links to maps, graphs, and commentary that have been created for the Northwest Region, related to how life science companies are funded, where they are in relation to transportation options, and educational attainment.
Q2 2022 Market Insights
Vacancy Rate
9.5%
NNN Asking Rate
$59.52
Under Construction
761,797 Sq. Ft.
Construction Pipeline
2022
Q2
East Bay Market
Download local market report
Click map for more information
Key Facts
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Tenants in the Market
100,000 Sq. Ft.
Lisa Kohler Senior Research Analyst | Pleasanton Lisa.Kohler@colliers.com
William Chui Research Analyst | Oakland William.Chui@colliers.com
Derek Daniels Research Director | San Francisco Derek.Daniels@colliers.com
*Arrows indicate change from Q4 2021
Capital Markets Rankings
The average price per square foot for the region was $717.82. East Bay was below this at $594.22.
There were 12 sales totaling $1.5 billion in total consideration and 2.1 million square feet. East Bay accounted for 13.5% of the overall consideration and 16.3% of the overall square footage.
February 24, 2021
SACRAMENTO Market
Click dots for more information
Bob Shanahan Research Manager | Sacramento & Reno Bob.Shanahan@colliers.com
$26.30
801,000 Sq. Ft.
503,000 Sq. Ft.
There were 12 sales totaling $1.5 billion in total consideration and 2.1 million square feet. Sacramento accounted for 0.2% of the overall consideration and 1.7% of the overall square footage.
The average price per square foot for the region was $717.82. Sacramento was below this at $78.68.
34
23
graduates in life sciences
San Francisco Market
9.7%
$80.00
598,335 Sq. Ft.
270,007 Sq. Ft.
There were 12 sales totaling $1.5 billion in total consideration and 2.1 million square feet. San Francisco accounted for 23.5% of the overall consideration and 14.9% of the overall square footage.
The average price per square foot for the region was $717.82. San Francisco was above this at $1,130.78.
SF Peninsula Market
Nicole So Senior Research Analyst | Silicon Valley & San Francisco Peninsula Nicole.So@colliers.com
4.5%
$69.53
4,740,882 Sq. Ft.
1,662,500 Sq. Ft.
There were 12 sales totaling $1.5 billion in total consideration and 2.1 million square feet. San Francisco Peninsula accounted for 23.8% of the overall consideration and 18.0% of the overall square footage.
The average price per square foot for the region was $717.82. San Francisco Peninsula was above this at $952.42.
Silicon Valley Market
Lena Tutko Research Director | Silicon Valley Lena.Tutko@colliers.com
16.7%
$62.91
Conversions
549,624 Sq. Ft.
2,185,500 Sq. Ft.
There were 12 sales totaling $1.5 billion in total consideration and 2.1 million square feet. Silicon Valley accounted for 17.7% of the overall consideration and 13.9% of the overall square footage.
The average price per square foot for the region was $717.82. Silicon Valley was above this at $916.40.
Portland Market
Jamison Shields Research Analyst | Portland Jamison.Shields@colliers.com
Total Funding 2021 YTD
$685.4 million
10 Year Average Funding
$383.9 million
% Public Funding (this year)
82.0%
% Private Funding (this year)
18.0%
13.0%
$32.88
269,908 Sq. Ft.
TIMs
There were 12 sales totaling $1.5 billion in total consideration and 2.1 million square feet. Portland accounted for 6.1% of the overall consideration and 18.2% of the overall square footage.
The average price per square foot for the region was $717.82. Portland was below this at $242.25.
Puget Sound Market
$2.4 billion
$1.3 billion
27.1%
72.9%
12.1%
$58.48
752,598 Sq. Ft.
624,000 Sq. Ft.
There were 12 sales totaling $1.5 billion in total consideration and 2.1 million square feet. Puget Sound accounted for 15.1% of the overall consideration and 17.1% of the overall square footage.
The average price per square foot for the region was $717.82. Puget Sound was below this at $635.77.
Q2 2021 LOCAL MARKET REPORTS
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