Washington's life science industry is noted as one of the leading economic drivers in the state, and in honor of this Governor Jay Inslee signed a proclamation on Tuesday designating June 1st as Life Science Day, in preparation for the annual Life Science Innovation Northwest Conference. Experts agree that the growth of the state's, and in particular Seattle's life science sector, is a factor that attracts many people to the region, not just those looking for STEM jobs. However, this interest has also caused a shortage of life science office/laboratory space available in Seattle and elsewhere to accommodate a continuing growth of the industry.
According to a report by Life Science Washington, the industry is the fifth largest employment sector in the state and is growing. Currently there are 98,100 life science sector jobs supported in all of Washington and 368 life science companies in Seattle. From 2007 to 2014, job growth increased by 9 percent and is expected to continue. "This is our primary goal, to grow the life science industry in Washington state," said Marc Cummings, the vice president of public policy and external affairs for Life Science Washington.
"The life science sector is the tightest real estate market in Seattle"
The life science sector is the tightest real estate market in Seattle and experts say there is no relief expected within the next year. The South Lake Union neighborhood provides 4.5 million square feet of life science space, and it sits at a one percent vacancy rate. According to Mike Ruhl, a vice president for BioMed Realty, the vacancy rate will be going down even more this year as BioMed continues to lease space in its new Vue Research Center, which is located at 500 Fairview Avenue and opened in late March.
"It will remain tight for the balance of this year and probably into next year. Unless one of two things happens, a tenant moves out of the market or new space is built, which is an 18 to 24 month process," said Ruhl.
The Infectious Disease Research Building, located at 307 Westlake, has a tenant that will be moving out this year to a new location, opening up 25,000 square feet. However, new tenants are already looking at that space.
Several public companies have moved into or expanded in the area and this has significantly increased the demand for office/laboratory space, according to Kidder Mathews' Seattle Life Science third quarter 2015 report, its latest edition. A resurgence of real estate activity has resulted in the leasing of the remaining space that could be economically and structurally converted to laboratory space and also triggered a limited amount of new development. Construction for laboratory facilities is slow due to financing constraints and expensive specialized improvements required.
The demand for office/laboratory space in the greater Seattle market heated up late 2014 and will continue into 2016, according to the same report. The minimal amount of shell space currently under construction will lease up, and rental rates will increase. Tenants requiring space in 2016 and 2017 will have to plan well ahead to lease unencumbered shell space currently under construction or backfill previously occupied space vacated by expanding companies or firms moving out of the area., says Kidder Mathews.