Travis McCready, head of life sciences, Americas markets, at JLL, was a guest on the latest episode of Nareit’s REIT Report podcast.
McCready said 2023 was one of the most challenging years in memory for life sciences real estate due to a slowdown in the deployment of venture capital, higher interest rates and inflation, and “rather aggressive” real estate development of lab space in the past two years.
Based on activity so far in 2024, though, “the year is already shaping up to be much more positive than the year before, so fingers crossed that we are looking at a return to an upwards trajectory in the months and year to come,” McCready said.
Post-COVID, there was a rush to build lab space, McCready explained. That resulted in a historically high availability of lab space across the United States compared to demand. “We've never seen this degree of disequilibrium before. We're just now starting to come down off of the peak of that, where we're about three times or four times, depending on the market, with too much space. To be crass, we're a python swallowing a pig,” he said.
McCready stressed that when looking at life sciences markets, “everything is hyperlocal…there is no monolithic performance that we can ascribe to even a market overall anymore.”
During the interview, McCready also commented on: evolution in life sciences construction methods; the impact of AI on life sciences; other key breakthroughs that could provide opportunities and challenges for the life sciences real estate sector this year, and the need to keep an eye on medtech in 2024.