New Jersey Winter 2018 In This Issue: Introduction NEW JERSEY Life Sciences Industry Overview Welcome to the first issue of the Avison Young New Jersey Life Sciences Specialty Practice Group's Newsletter. Our objective in publishing this newsletter is to share relevant information about New Jersey's life sciences industry, tying together recent real estate events with emerging industry trends. We want our readers - those life sciences executives with responsibility for their organizations' real estate decisions and resultant capex spends, to stay up to date on how New Jersey's real estate market is responding to the industry's evolving needs Newsworthy Events Key Real Estate Statistics Recent Life Sciences Real Estate Transactions New Jersey Life Sciences Industry Overview Choose NJ reports the following key metrics for the Life Sciences industry in New Jersey: #1 #2 #2 for Biotech Growth Potential (Business Facilities 2015) for Biotech Strength (Business Facilities 2017) Region for NIH Funding (NIH Report Database 2016) According to the New Jersey Department of Labor and Workforce Development: Avison Young Life Sciences Group Life Sciences employment in New Jersey accounts for 3.5% of all private sector workers in the state, as compared to 1.0% nationally Life Sciences payrolls in New Jersey account for 7.8% of the state's total wages 1
New Jersey Life Sciences Industry Overview (Cont.) New Jersey's highly ranked teaching hospitals, medical schools and universities graduate more than 20,000 Life Sciences students annually, adding to the rich labor pool of highly skilled, well paid Life Sciences workers in the state. This, along with the state's strategic location within the US Northeast Corridor; diverse concentration of logistical infrastructure via truck, ship, air and rail; and close proximity to the global financial and media markets in and around New York City, will continue to provide a strong platform for New Jersey's Life Sciences industry to evolve and prosper. Newsworthy Events Grow New Jersey Incentives of almost $120 million awarded to Life Sciences Companies in 2017 1 In 2017, the New Jersey Economic Development Authority awarded $118,963,570 to nine life sciences companies, who collectively committed to creating 553 new jobs while retaining 2,936 jobs in the state Here are the details of the nine awards: Company Award New Jobs Retained Jobs Aptapharma $4,522,100 35 40 Biogenesis $9,360,000 16 62 Edenbridge Pharmaceuticals $875,000 25 Eywa Pharma $2,210,000 34 GeriCare Pharma $11,700,000 130 Lifecell $14,872,500 50 561 Lonza $3,262,500 174 Modern Meadow $32,217,500 263 Sanofi $39,943,970 2,099 Total: $118,963,570 553 2,936 Silicon Valley Bank reports on Trends in Healthcare Investment in their 2018 Annual Report 2 Silicon Valley Bank's 2018 Healthcare Investment Trends reports a record setting year in 2017 Venture fundraising reached $9.1 Billion, a 26% increase over 2016 and surpassing the previous record of $7.5 Billion set in 2015 Investments in venture-backed biopharma, medical device and diagnostics and tools were also expected to break a record at $15.5 Billion, up 31% over 2016 Biopharma investment focused on oncology and platform companies Non-invasive monitoring in cardiovascular, uro/ gyn and neuro were strong in medical device investments, while artificial intelligence led the way in diagnostics and tools investments For 2018, annual healthcare fundraising is expected to decline $6 to $7 Billion from 2017's record setting levels A steady pipeline of crossover backed oncology companies should achieve 28-32 IPO's versus 31 IPO's in 2017 1 "Approved Grow NJ Projects", Grow New Jersey website 2 "Trends in Healthcare Investments and Exits 2018", Silicon Valley Bank, February 2018 Early stage device M&A should continue and neuro and drug delivery companies may join cardiovascular companies to spark the next round of early stage device acquisitions in 2018 2
Newsworthy Events (Cont.) Celgene will launch a biopharma incubator in Summit 3 Celgene will launch the Thomas O. Daniel Research Incubator and Collaboration Center on their Summit West Research campus in Summit The 16,000 square foot facility will provide lab space for entrepreneurs interested in medical research and innovation and will open later in 2018 EY to Sponsor a Science, Technology, Engineering and Math Campus in Jersey City 4 EY will join forces with the Liberty Science Center in Jersey City to sponsor its SciTech Scity project This development, on a 14-acre site, will provide a campus for people and companies to work on STEM projects 3 NJ Biz, January 17, 2018 4 NJ Biz, January 24, 2018 5 Forbes Online, January 23 2018; Crain's Online, December 14, 2016 New York City and the State of New York commit over $1 billion to attract Life Sciences companies 5 New York City plans on investing $500 million over 10 years to help create 16,000 new life sciences jobs in New York City The initiative, known as LifeSCI NYC, includes $100 million to create an applied life sciences campus The campus is intended to become a hub for the development of up to 3 million square feet of commercial lab space, facilitated by $300 million in tax incentives Other components of NYC's initiative include $50 million to build more space for research with high potential for commercialization and $20 million for 80 early stage companies with matching funds from private investors The State of New York unveiled a plan to invest $650 million to encourage the development of the Life Sciences industry on a state-wide basis, including $250 million in tax incentives, $200 million in capital grants for lab space and $100 million for investment capital to be matched by $100 million in private capital 3
Key Real Estate Statistics AYNJ's Life Sciences Specialty Practice Group maintains an ongoing, dynamic database of lab, R&D and manufacturing real estate, either in use by, or suitable for, Life Sciences industry tenants. Our current inventory consists of more than 100 properties, with key metrics as follows: Properties comprise more than 9 million square feet of space This includes almost 3.2 million square feet of available space, of which more than 2.2 million square feet is vacant, for an availability rate of 35% and a vacancy rate of 24.5% The average asking rent for this available space is $16.21 per square foot, nnn The maximum amount of contiguous space available is 857,572 square feet Recent Life Sciences Real Estate Transactions⁶ The following transactions were recently completed by Life Sciences tenants: Tenant Transaction Type Square Footage City Regeneron Renewal/Expansion 50,524 Basking Ridge Diagnostica Stago Renewal/Expansion 41,489 Parsippany Edenbridge Pharmaceuticals Relocation 18,684 Parsippany Lonza Relocation 55,142 Morristown Sanofi Relocation 84,237 Ridgefield 6 General market information from multiple public sources 4
About Avison Young Founded: Total Real Estate Professionals: Offices: Brokerage Professionals: Property Under Management: 1978 2,600 82 1,100 100 million sf Avison Young is the world's fastest-growing commercial real estate services firm. Headquartered in Toronto, Canada, Avison Young is a collaborative, global firm owned and operated by its principals. Founded in 1978, the company comprises 2,600 real estate professionals in 82 offices, providing value-added, client-centric investment sales, leasing, advisory, management, financing and mortgage placement services to owners and occupiers of office, retail, industrial, multi-family and hospitality properties. EDMONTON CALGARY VANCOUVER LETHBRIDGE REGINA WINNIPEG PITTSBURGH CLEVELAND DETROIT COLUMBUS SACRAMENTO MINNEAPOLIS CHICAGO (2) RENO DENVER ST. LOUIS LAS VEGAS INDIANAPOLIS PHOENIX NASHVILLE DALLAS MEMPHIS HOUSTON KNOXVILLE AUSTIN SAN ANTONIO TAMPA SAN FRANCISCO LOS ANGELES (4) OAKLAND ORANGE COUNTY SAN MATEO SAN DIEGO SAN JOSE/SILICON VALLEY ORLANDO MEXICO CITY TORONTO (2) TORONTO NORTH TORONTO WEST WATERLOO REGION OTTAWA MONTREAL JACKSONVILLE WEST PALM BEACH BOCA RATON FORT LAUDERDALE MIAMI MONCTON HALIFAX BOSTON HARTFORD FAIRFIELD/WESTCHESTER LONG ISLAND NEW YORK CITY PHILADELPHIA NEW JERSEY(2) SUBURBAN MARYLAND WASHINGTON, DC TYSONS RALEIGH-DURHAM (2) CHARLOTTE GREENVILLE CHARLESTON ATLANTA MANCHESTER COVENTRY LONDON (2) THAMES VALLEY HAMBURG BERLIN DUESSELDORF FRANKFURT MUNICH BUCHAREST About Avison Young's Life Sciences Specialty Practice Group AY s Life Sciences Specialty Practice Group provides multi-disciplined expertise aligning business goals with real estate solutions while addressing complex technical challenges. Real estate requirements for Life Sciences companies are technically complex, capital intense and atypical for real estate service providers whose principal focus is office or warehouse space. Time to market and funding are the crucial factors driving innovation and successful new pharmaceutical product launches, which in turn, require laboratories, vivaria, pilot plants and manufacturing facilities. Avison Young s Life Sciences Specialty Practice Group brings a diversely credentialed team of real estate professionals who understand the pharmaceutical product life cycle as well as the technical complexities that can create significant budgetary and scheduling risk. AY s Life Sciences team members have successfully addressed these risks that surround real estate decision making throughout all phases of the product life cycle and across all technical aspects of planning, designing, engineering and constructing any type of Life Sciences space. 5
About Avison Young's Life Sciences Specialty Practice Group (Cont.) Avison Young s Life Sciences team s unique approach to the strategic and technical challenges clients face when engaging the real estate process is anchored in the team s individual and collective life sciences experience and broad-based expertise. The centerpiece of this approach is how we integrate our clients technical and financial requirements into the deal negotiation process, ensuring these requirements are incorporated accurately into the transaction documents. This fully integrated process enables our team to develop innovative strategies with credible budgets and schedules at early transaction stages, encumbering clients with the facts needed to make more fully informed decisions. As each transaction evolves, our value engineering and budget monitoring capabilities ensure real estate solutions are planned and designed with requisite scalability, and are completed under-budget and on-schedule, thereby optimizing the clients real estate assets. This fully transparent, risk averse, cradle to grave model creates seamless continuity and allows complete flexibility, maximizing the efficacy of each client s internal resources on either a portfolio or transactional basis. Services include: Strategic Real Estate Planning Site Selection Pre-Lease Budgeting and Scheduling Lease Negotiation Site Evaluation Due Diligence Oversight Consultant Team Selection, Engagement and Oversight Post-Lease Project Management Construction Management 6
New Jersey Winter 2018 For more information, please contact: 2018 Avison Young. All rights reserved. Thomas V. Giannone Principal 732.243.8545 tom.giannone@ Steven B. Bleiweiss Senior Vice President 732.243.8542 steve.bleiweiss@ E. & O.E.: The information contained herein was obtained from sources which we deem reliable and, while thought to be correct, is not guaranteed by Avison Young. 99 Wood Avenue South, Third Floor, Suite 310 Iselin, NJ 08830 T 732.983.4800 1120 Headquarters Plaza, North Tower, 8th Floor Morristown, NJ 07960 T 973.898.6360 F 973.898.9062