Life Sciences Outlook

Transcription

1 United States 2018 JLL Research Report Life Sciences Outlook Breakthrough discoveries at a breathtaking pace

2 What s inside? 3 Cluster rankings 4 The U.S. life sciences landscape in Trend 1 Creating new models, real estate responds to shifting priorities and becomes more nimble 8 Trend 2 The race for talent is having a ripple effect on real estate Trend 3 Moving into new territory: Life sciences clusters across the 12 U.S. are finding unique solutions to meet the needs of growing companies Looking forward Increasing investment is funding the next generation of 14 innovation in the ecosystem

3 JLL s Life Sciences Cluster Ranking takes an annual look at the evolution of the top geographies across the U.S. Once again, Boston and San Francisco maintained their leadership at the top of the cluster ranking index. Despite high rents and low availability, these life science ecosystems continue to thrive as the top centers of talent and innovation. Some of the most dynamic changes this year were in the mid-tier clusters. The Denver metro area has seen life sciences employment double in the last decade as the area is home to a growing start-up community. Seattle has benefitted from a flurry of M&A activity and now commands some of the highest rents outside of San Francisco and Boston. Suburban Maryland, New Jersey and Westchester, three long-established clusters, recorded some of the highest year-over-year job growth in the industry. Joining the list for the first time is Houston. Houston s life sciences sector has been gaining momentum in recent years. Earlier this year, capitalizing on its long history as a healthcare powerhouse, Houston launched an ambitious plan to create a new collaborative life sciences research hub on the campus of the Texas Medical Center. U.S. cluster rankings Rank Cluster Weighted score 1 Greater Boston Area San Francisco Bay Area San Diego Metro Area Raleigh-Durham Metro Area Philadelphia Metro Area Suburban Maryland/Metro DC Seattle Metro Area New Jersey Los Angeles/Orange County Westchester County Denver Metro Area Chicago Metro Area New York City Minneapolis - St. Paul Metro Area Houston Long Island 23.2 Life sciences employment concentration: Weight: 20.0% Measured as the percent of industry employment against total metro private employment. (BLS, 2016) Life sciences venture capital funding: Weight: 15.0% Funding from 2017 (CBInsights) Total lab supply: Weight: 15.0% Life sciences employment growth: Weight: 10.0% Life sciences establishments concentration: Weight: 10.0% Measured as the percent of industry establishments against total metro private establishments. (BLS, 2016) Life sciences National Institutes of Health funding: Weight: 10.0 % National Institutes of Health, 2017 Market occupancy rate: Weight: 10.0% Average asking rent (NNN): Weight: 10.0%

4 4 Life Sciences Outlook United States 2018 A new era of collaborative research and development: The U.S. life sciences landscapein 2018

5 Life Sciences Outlook United States Innovation in the life sciences industry is evolving at a breathtaking pace. The sector is discovering and developing new transformative therapies for patients across a wide range of diseases. There is a deep pipeline of new innovations emerging in research and development (R&D), with both big companies and small startups making fresh tracks with unprecedented mechanisms and novel medicines. With new therapies, many have the potential to cure diseases, rather than simply treating them. Meanwhile, innovative approaches to conventional small molecule drugs are exploding, and computational technologies, like machine learning, are contributing in new and important ways to drug discovery. Across the industry, new explorations promise to have a big impact on patients. These meaningful innovations are at the center of the momentum behind the growing biotech industry. The worldwide prescription drug market is growing at 6.5 percent compounded annually and is expected to reach $1.06 trillion by But the industry challenges associated with getting a drug to market are undeniable. For example, the average cost to develop and win FDA approval for a new prescription drug in the United States is about $2.6 billion, reports the Tufts Center for the Study of Drug Development. Despite high development costs, the majority of drug launches achieve modest sales in the first five years on the market. At the same time, early-stage ventures are driving innovation. The majority of drugs approved in recent years originated from small companies 63.0 percent of them over the last five years, according to HBM Partners. In 2017, midsized and smaller biopharma companies received a record number of 23 new drug approvals. In the life sciences clusters across the United States, industry giants are looking for ways to reach farther out on the edge of innovation. Increasingly, these big players are setting up venture capital funds and partnering with startups and licensing technology to fuel their own drug pipelines. By investing in a broad portfolio of young ventures, a big drug company can leverage outside scientific talent and cast a wide net to gain access to breakthrough discoveries in areas of the company s strategic interest. Many are also outsourcing R&D while reducing product development efforts internally. According to PricewaterhouseCooper s Health Research Institute (HRI), one in three U.S. biopharmaceutical companies has revamped its approach to research and development (R&D), looking to boost productivity by reconfiguring R&D operations and organizational structure, increasing its focus on partnerships and alliances outside its organization. As companies pursue platforms to enhance collaborations, their real estate needs are changing. All of the above trends have profound implications for those providing real estate solutions for the life sciences industry. By investing in a broad portfolio of young ventures, a big drug company can leverage outside scientific talent and cast a wide net to gain access to breakthrough discoveries in areas of the company s strategic interest.

6 6 Life Sciences Outlook United States 2018 State of the market Trend 1 Creating new models, real estate responds to shifting priorities and becomes more nimble Incubator labs provide a new ecosystem With real estate costs at all-time highs and availability at all-time lows, real estate owners and users are shifting priorities to create new models. The efforts include pursuing incubator lab space to fill a gap for young companies trying to grow in the top clusters. Part fund, part accelerator, these incubators provide a startup platform in strategic locations where the key building blocks for life sciences innovation thrive. These spaces nurture the growth of earlystage life sciences companies by providing turnkey laboratory and office space, entrepreneurial support, strategic programming and access to capital. Incubators provide many of the advantages of being at a big company while allowing the flexibility for an entrepreneur to drive scientific research forward. Life sciences incubators are popping up across the United States and are becoming a critical part of the ecosystem. Massachusetts alone is home to more than two dozen incubators. One new player, New York s Alexandria LaunchLabs in Manhattan s East Side Medical Corridor, was the first biotech incubator to launch in New York City. The LaunchLabs, located at the Alexandria Center for Life Science, opened its doors to companies in late The center includes 15,000 square feet of lab and office space that is home to approximately 20 startup companies. Those companies that become part of the Alexandria LaunchLabs family have access to strategic risk capital for funding through the Alexandria Seed Capital Platform, expertise in early-stage company building and a broad range of advisers. The upcoming Alexandria Center in the heart of Cambridge s Kendall Square neighborhood will open in late Alexandria aims to have LaunchLabs be a community of small firms, rather than split the lab space up among one or two larger tenants.

7 Life Sciences Outlook United States On the pharma side, early adopter Johnson & Johnson established its JLABS incubator concept five years ago and it is now in multiple cities across the globe. JLABS has 11 locations and more development under way. The JLABS model emphasizes scalability and offers space options from a humble 5-foot bench to a 5,000-square-foot core research lab filled with latest specialized equipment. In mid-2018, NYC, a 30,000-square-foot, facility opened its doors. The latest JLABS facility, located in the New York Genome Center (NYGC) is a collaboration between Johnson & Johnson Innovation LLC, New York State and the NYGC. Top research universities have long been homes for early-stage life sciences ventures and initiatives such as QB3, a UC Institute. QB3, founded in late 2000 in the San Francisco Bay Area, began as an academic endeavor with operations at the UC campuses at Berkeley, San Francisco and Santa Cruz. QB3 has since opened several incubator spaces around the Bay and has facilitated major discoveries and innovation in areas including genome editing, genomics data sharing and proteomics. QB3 will open its newest incubator under the name MBC BIOLABS in San Carlos in Meanwhile, industry giants are redesigning for flexibility and collaboration to become more nimble and facilitate research and product development faster. The decline of the blockbuster drug has forced a reckoning in laboratory design one that s exposed new pathways to a more agile, futurefriendly lab. The dark labs of yesteryear are giving way to lab designs that incorporate natural light, sustainability features and attractive sight lines that, ideally, will promote well-being and inspire creative thinking about research problems. Historically, reconfiguring a pharmaceutical or biotech lab to support research for an all-new remedy or cure has been a timeconsuming and expensive undertaking. But that s changing as life sciences companies increasingly steer clear of conventional lab design in favor of smaller, flexible spaces to keep up with the pace of innovation. According to a JLL survey of top life sciences companies, space utilization has increased in the latest lab projects. In new buildings, lab space per scientist has been reduced by 25.0 percent compared to older and B lab facilities. Lab space per scientist (s.f.) Industry benchmark Source: JLL Global Benchmarking Research 499 These tighter footprints for labs help facilitate creative interaction with colleagues, preferably without requiring de-gowning, and can be easily reconfigured to accommodate different kinds of research to help scientists perform their studies as quickly as possible. In addition, mobile benches and unassigned workspaces are being used to allow for fast changes in personnel and/or the type of work being performed. Some lab designers are installing retractable electrical cords in the ceiling and technical infrastructure into moveable facades so workspaces can be set up in different configurations around the lab floor, rather than being limited to fixed walls. Another strategy is to build in heavy-duty floor slabs in laboratory corridors to accommodate periodic moves of heavy equipment. By investing in adaptable laboratory features today, a company can position its R&D operations for longterm agility and can further advance the ultimate goal of R&D: the next great breakthrough. 522 New -B Class B-C

8 8 Life Sciences Outlook United States 2018 State of the market Trend 2 The race for talent is having a ripple effect on real estate With increasing innovation and company creation, the demand for talent is much higher than ever before. From scientists and executives to advisers, investors and board members, people are by far the most important ingredient in the life sciences ecosystem. The life sciences industry continues to be a leading driver of employment across the country, providing 1.73 million jobs in approximately 85,000 companies. In 2017, employers listed almost 264,000 postings for life sciences positions, nearly 10,000 more openings than five years ago, according to a study by the Coalition of State Bioscience Institutes. As a result, finding, attracting and retaining great people is key to the drug discovery industry. According to PwC s Health Research Institute (HRI), 51 percent of biopharma leaders, the highest of any industry, report that hiring has become more difficult and only 28.0 percent say they are confident they have access to top talent. There is no end in sight. The Bureau of Labor Statistics projects employment growth for R&D in biotechnology to grow 19.0 percent from 2016 to 2026, nearly double the average for the overall employment growth in the U.S. Projected employment growth ( ) 10% 19% Total U.S. Employment Growth R&D in Biotechnology Source: U.S. Bureau of Labor Statistics, Employment Projections program

9 Life Sciences Outlook United States The battle for talent is having a ripple effect on major real estate decisions. Life sciences companies are intensifying their drive to be near leading academic research centers and the supportive R&D ecosystems that surround them. According to a JLL survey of top life sciences companies, less than 15.0 percent of their locations are outside of the top clusters. Due to this industry expansion, companies find that it can take months to find qualified candidates for open positions. A recent study by MassBio reports that it takes an average of more than two and a half months to fill an opening. The average rate across the entire U.S. economy is one month. At the same time, compensation demands for qualified candidates can also pose issues. According to the BLS, the annual mean wage for the life scientist is over $82,000. Colleges and universities have risen to the challenge, and the number of Ph.D. graduates in the life sciences has risen 19.0 percent in the last decade. What makes the top life sciences clusters distinct is their access to talent. Top life sciences clusters are the source for Life sciences Ph.D. graduates (annual) Chicago New York Raleigh talent 735 Philadelphia 803 Los Angeles 1,052 San Francisco 1,065 Boston 1,317 Source: Integrated Postsecondary Education Data System (IPEDS)

10 Rent ($ NNN) 10 Life Sciences Outlook United States 2018 But being in the large R&D ecosystems will cost you, as the larger, more concentrated lab clusters command higher rents. $100 $80 NYC East Cambridge $60 $40 $20 Westchester San Diego Seattle Philadelphia Houston Long Island DC/Maryland Minneapolis LA New Jersey Raleigh Chicago Denver Greater Boston San Francisco $ Lab Inventory (million s.f.) Source: JLL Research According to a survey of JLL clients, nearly 80.0 percent of location decisions were based on being close to the universities and an R&D ecosystem despite the high cost of being in the top clusters. Cost of doing business: 14% R&D space availability: 4% R&D ecosystem: 45% Labor availability: 36% Source: JLL Research

11 Life Sciences Outlook United States Swimming in the same pond: Similar demographics attract tech and life sciences Being in a top life sciences cluster can impact an employer s ability to find and retain life sciences talent. But in the top life clusters, employers are also competing for talent with another booming sector technology. The ecosystems that have attracted life sciences companies to the top clusters are often the same that many of technology companies are after. Innovation in computing and its increasingly frequent application in drug development is causing more overlap between the tech and life sciences industries and increasing the need for tech talent inside life sciences companies. Rapid technological innovations, such as CRISPR gene editing, (CAR) T-Cell Therapy and breakthroughs in fields such as computational biology, create the need for expertise in a broad range of cuttingedge technologies, including data analytics, 3D printing, AI, next-gen sequencing, process integration, analytic chemistry and CAD (computer-aided design), to name a few. All that computing requires seats, desks, power and space. As a result of the growing promise of computational science, traditional labs are shrinking to make way for more office space. In terms of lab design, the evolution represents a fairly significant shift in space utilization. More traditional R&D facilities typically were split between 75.0 percent lab space and 25.0 percent computational space. New designs are gravitating toward 50.0 percent lab and 50.0 percent computational space. As industry giants and incubators aim to create a collaborative R&D environment for companies whose research can potentially spawn many different drugs, real estate is evolving and providing the platform for flexibility and collaboration for this industry to innovate.

12 12 Life Sciences Outlook United States 2018 State of the market Trend 3 Moving into new territory: Life sciences clusters across the U.S. are finding unique solutions to meet the needs of growing companies A lack of available labor is not the only limitation facing life sciences companies; they are also burdened by a lack of available space. Taking a look at this year s rankings, 8 of the top 10 U.S. clusters currently have single-digit direct vacancy rates. How the industry is dealing with exceptionally low availability varies by cluster, and it is driving a variety of real estate solutions across the United States. Top clusters are moving beyond traditional boundaries In a sector that remains defined by its ability to stay on the cutting edge, clusters are continuously evolving to meet the needs of the companies that call them home. In Boston, one of the most noteworthy trends is the blurring of the boundaries of the traditional cluster. A good example is the Innovation Square (isq) project in Boston s Seaport District, which broke ground at the end of isq is a phased, 375,000-square-foot, research and development life sciences campus. It is the first newconstruction, multitenant lab building on the South Boston Waterfront. Construction of Phase I, which consists of a four-story, 125,000-rentable-square-foot R&D building, is expected to be completed in Mass Innovation Labs will anchor the first two floors. Founded in 2015 in Cambridge's Kendall Square, Mass Innovation Labs is a leading accelerated commercialization program for the biopharmaceutical industry. The isq campus is one of three expansion projects that Mass Innovation Labs will be launching in 2018, including new sites in Brighton and Cambridge. isq s urban location is expected to be a draw for established biotech companies as well as smaller firms and, at a time when life sciences organizations are focusing more heavily on data collection and analytics, the Seaport Submarket offers the strong presence of a hightech talent pool.

13 Life Sciences Outlook United States Breakout clusters are capitalizing on opportunities for collaboration One of the most ambitious examples of new projects in this new era of collaborative research and development is TMC 3, a new, 1.5 million-square-foot collaborative research campus that will break ground in 2019 at the Texas Medical Center (TMC) in Houston. The new biomedical research hub will cluster researchers and industry experts together on a collaborative 30-acre campus. The campus will integrate researchers with a host of expertise from the private sector and is a collaboration between the five founding institutions: Texas Medical Center, Baylor College of Medicine, Texas A&M University Health Science Center, the University of Texas Health Science Center at Houston (UTHealth), and the University of Texas MD Anderson Cancer Center. The centerpiece of the TMC 3 campus designed to resemble the double helix shape of a DNA strand will be a multistory facility housing shared core labs, retail and commercial space. Emerging clusters are forging new frontiers Outside of the top clusters, new life sciences collaborations are sprouting up in premier locations for medical care, research and education to accelerate innovation. For example, a new life sciences incubator opened in the GuideWell Innovation Center in Lake Nona s Medical City. The Lake Nona Medical City, a 650-acre health and life sciences park in Orlando, Florida, is the center of the University of Central Florida's (UCF) Health Sciences Campus and includes the university's College of Medicine and Burnett School of Biomedical Sciences. The UCF Life Science Incubator, Central Florida s first life sciences incubator, opened in early 2018 and is a partnership between UCF, the City of Orlando, the Tavistock Group, Florida Hospital and the Florida High Tech Corridor Council. As part of the incubator program, entrepreneurs are given access to the area s facilities, plus resources for research and coaching. The goal of the new Life Science Incubator is not only to help the entrepreneurs making medical and scientific breakthroughs succeed, but also to keep them in this growing cluster.

14 14 Life Sciences Outlook United States 2018 Looking forward Several rising trends could impact real estate decisions and strategy in life sciences clusters Funding at all-time highs to nurture the life sciences industry Venture capital investment in life sciences companies surpassed $11 billion in 2017, and 2018 is on track to set a new record. But location counts. The top life sciences clusters command the majority of venture capital funding going to startups in the sector. San Francisco and Boston received over two-thirds of funding, while no other cluster received more than 5.0 percent. Venture cash is flowing into the sector at a record pace Venture capital funding Source: CB Insights VC funding Year-end forecast Investing in early-stage biotechs is providing the resources to nurture drug development and helping to bring drugs to market faster and more cheaply. But, while early-stage startups are being fueled with more funding than they ever have been in the sector, a recent trend has arisen in how venture financing is provided. In recent quarters, early seed funding levels have held stable while the size of later rounds, Series A or Series B, have gone up considerably. Investors are skipping early seed funding to wait longer and are not investing ahead of the actual clinical proof of concept. For context, Series A is typically spent reproducing the founding science, establishing the biotech s platform, identifying the initial lead programs and often securing partnerships. The Series B for a drug discovery startup often funds the programs to advance them into the clinic. As a result, the sector has added a number of new unicorns: private companies with billion-dollarvaluations, having raised hundreds of millions in their Series A or B rounds. Cambridge-based Moderna Therapeutics, for example, has seen its valuation soar to $7 billion since being founded in Moderna has raised more than $2 billion from investors and partners to fund the development of messenger RNA drugs. However, the company has released limited clinical data showing that the technology works in humans. The implications of this changing dynamic in funding is that today s early-stage biotech startups have more resources than their peers five years ago. This should enable better clinical programs, more expansive pipelines and, combined with the rise in access to real estate resources through platforms such as incubators and accelerators, enhanced innovation to bring more drugs to market faster and cheaper. The year 2018 will likely end with a flurry of initial public offerings (IPOs) based on a backlog of well-financed private biotechs with premium valuations. With nearly 40 biotechs and pharmas going public nationwide in 2017, up from 29 in 2016, the IPO market looks healthy.

15 Life Sciences Outlook United States Venture funding is not the only game in town Fueled by a desire for innovation and new medical breakthroughs, the life sciences industry continues to enjoy substantial growth due to increased investment in R&D by biopharma industry leaders. Biopharma companies were among the top companies in 2017 to post an overall increase in R&D spending. While tech companies spent more on R&D than any other sector in the S&P 500, led by Amazon, Alphabet and Microsoft, top biopharma companies weren t far behind. Biopharma keeps pace with top tech for R&D investment Amazon Alphabet Microsoft Roche Apple Merck Novartis Johnson & Johnson Pfizer Facebook $14.5 $12.7 $11.7 $10.8 $10.3 $9.2 $9.1 $7.8 $6.4 $17.4 The uptick in R&D spending is one more factor that points toward a strong future of innovation for the industry, including significant advances in biological sciences and pharmaceuticals, and the expansion of more effective drugs and curative and preventive treatments aimed at enhancing the quality of human life. The U.S. life sciences innovation ecosystem is vibrant. Building on collaborative research supported by the National Institutes of Health at teaching hospitals, universities and research institutions, it progresses through startups funded by venture capital and into established biotech and pharmaceutical companies funded by the public markets. While each component of the ecosystem plays a distinct role, they share a common, unifying goal to use the power of science to improve and extend people s lives. Innovation has created some favorable tailwinds for life sciences companies, and the outlook is positive going forward. Annual R&D spend (billions, trailing 12 months as of June 2017) Source: CB Insights

16 16 Life Sciences Outlook United States 2018 Local submarket clusters

17 17 Greater Boston Greater Boston possesses the largest concentration of life science researchers in the United States and currently has over 3.5 million square feet of tenant requirements. Home to many of the global leaders in tech and life sciences, the Kendall Square neighborhood in East Cambridge has been touted by some as the most innovative square mile on the planet. 495 Northwest 95 North Cambridge Major lab supply: Clusters of established lab stock with longtime industry presence 90 Seaport District Emerging lab supply: Areas with limited lab stock today that are poised for growth Longwood Medical Area Life sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device and instrument Cambridge The global hub of R&D for the life sciences industry, 11 out of the largest 15 biotechnology companies in the world have a presence in Cambridge. Additionally, Massachusetts Institute of Technology graduates more PhD students in life science disciplinaries than any other school in the nation. The self-sustaining ecosystem, which includes other top-notch academic institutions, collaborative research space, VC firms, startups and global corporations, allows innovation and growth to thrive. Core Suburbs Life sciences tenants have recognized the added value the suburbs provide. As rents rise and space becomes extremely limited in Cambridge, tenants have looked to the inner suburbs as a relief valve. No longer just a lower-cost alternative, the suburbs are becoming an attractive option due to landlords strategic investments in the core suburban markets, luring tenants with amenities and new Class A developments. Boston Similar to the suburbs, the tightening Cambridge market has led several big-name tenants to explore potential lab space in the city of Boston, particularly in the Seaport. Given its urban location, the Seaport offers a uniquely attractive option. With a growing lab developments pipeline, the Seaport is poised to rise as a life sciences cluster.

18 Scorecard Economic 18 The Greater Boston area is home to many elite academic and research facilities, as well as a strong investor appetite for life science investment. Since 2014, VC funding has increased by over 279 percent for biotechnology companies in Greater Boston. Cluster score: 81.5 Workforce Total life sciences % life sciences to private employment Year-over-year growth Employment 90, % 4.5% Establishments 2, % 5.4% Funding Total life sciences % to total U.S. VC funding $3,820.1M 19.4% NIH funding $736.8M 8.9% Average asking Inventory Total supply % Total vacancy rent (NNN) 26.8M s.f. 7.8% $49.61 p.s.f. Greater Boston s economy is fueled by a large concentration of healthcare professionals, with life sciences employment accounting for 4.6 percent of the region s total employment, one of the highest proportions among U.S. life science clusters. Over the last decade, job and wage growth has increased two and three times faster than Greater Boston s overall job and wage growth respectively. Life sciences employment composition 54% 4% 9% Life sciences employment 90,566 7% 3% 23% non-lab using lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories Research & development Medical & diagnostic laboratories The region s strong life sciences community continues to experience immense growth in the R&D space. Over the last decade, R&D establishments have grown by over 60 percent. This growth is expected to continue as the top STEM job listings in the area were for medical scientist and scientific researcher. Life sciences establishment composition 62% 8% 3% 13% Life sciences establishments 2,196 8% 6% Pharma & medicine MFG Electromedical instrument MFG Medical equipment & supplies Testing laboratories R&D Medical & diagnostic laboratories

19 19 Cambridge East Cambridge Leasing activity fueled by new development Preleasing of new developments continues as most new projects secure commitments before opening. 100 Binney Street was fully leased before completion last month with anchor tenant Bristol-Myers Squib. In addition, 399 Binney Street is already 100 percent leased and doesn t finish construction until the first quarter of Both properties were developed by Alexandria Real Estate. Alexandria also announced it was going to be joining Mass Innovation Labs, LabCentral and others in the shared lab incubator space with its 20,000-square-foot LaunchLabs in Kendall Square. LaunchLabs is designed to dramatically accelerate the growth of early-stage life science companies. Earlier this month Takeda began its acquisition of Shire. Shire is the second-largest biotech employer in the state and both organizations have a significant presence in the submarket. Combined, Shire and Takeda have nearly 500,000 square feet of office and lab space in Kendall Square. If there is any space consolidation, this could provide much needed relief to the area. West Cambridge New development nearly complete The Davis Companies continues its speculative construction with its 35 CambridgePark Drive property. It is scheduled for delivery in the summer 2018, increasing the total supply of West Cambridge by almost 30 percent. The Bulfinch Companies continues to wait for an anchor tenant as it has rights to develop a 250,000-square-foot build-to-suit development in the Cambridge Discovery Park area. Bulfinch can have the building completed within 12 months of lease agreement. Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy East Cambridge 7.7M s.f. 2.7M s.f. 38.8% 2.9% -4.9 ppts West Cambridge 767K s.f. 0 s.f. 2.9% 5.3% +4.7 ppts # of large blocks over 50,000 s.f. 2 1 Under construction (s.f.) 1,012,000 s.f. 223,000 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) Recent activity Agios Pharmaceuticals 88 Sidney St. East Cambridge 146,034 s.f. Beam Therapeutics 26 Landsdowne St. East Cambridge 38,203 s.f. Activity key: 27 1,482,000 s.f. $79.48 p.s.f. +5.5% Leasing Sales Under construction Large blocks of space 4 100,000 s.f. $62.37 p.s.f. -2.6% 100 Binney St. Alexandria Real Estate East Cambridge 417,000 s.f. 35 CambridgePark Drive The Davis Companies West Cambridge 223,000 s.f.

20 20 Suburban Core Suburbs Space constraints fueling growth in suburbs The Core suburban lab market, which contains rentable space in Bedford, Lexington, Waltham and Watertown, continues to see significant rent growth as it extends its streak to seven straight quarters of increased rent growth. While East Cambridge continues to see record-low vacancy rates, growing companies are finding relief in the suburbs with more available spaces and lower rents. The newly constructed Linx Building, 490 Arsenal Street in Watertown, attracted Addgene and C4 Therapeutics, signing deals of 39,000 and 45,000 square feet respectively. Both companies are leaving behind highly desirable East Cambridge lab space. New construction isn t only attracting tenants out of Cambridge. Kala Pharmaceuticals rounded out leasing for the Linx, moving from its headquarters in Waltham, a competing Core suburban town. Homology Medicines will be relocating and expanding down the street to recently renovated 1 Patriots Park in Bedford, signing a 67,000-square-foot lease. Longfellow Partners recently purchased and renovated the structure to help compete against other new Core suburban developments. King Street Properties continues its speculative development in the suburbs, following up 115 Hartwell Avenue with 828 Winter Street in Waltham. The latter has yet to receive a signed lease as it nears completion later this year, but given activity around new suburban developments, it should only be a matter of time. Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy Core Suburbs 3.1M s.f. 1.4M s.f. 16.8% 7.7% -6.8 ppts # of large blocks over 50,000 s.f. 5 Under construction (s.f.) Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) Recent activity Kala Pharmaceuticals 490 Arsenal St. Watertown 66,052 s.f. Concert Pharmaceuticals 65 Hayden Ave. Lexington 55,522 s.f. Activity key: Leasing Sales Under construction Large blocks of space 344,000 s.f ,500 s.f. $48.06 p.s.f. 8.2% 828 Winter St. King Street Properties Waltham 144,000 s.f. Hayden Research Campus Lexington RBA: 397,000 s.f. Buyer: HCP Inc. Seller: Carlyle Group $574/s.f. (King Street Properties keeps interest in campus)

21 21 Boston CBD Seaport District New cluster beginning to take shape Phase I of Related Beal s Innovation Square continues progressing, locking in its first tenant. Mass Innovation Labs leased 54,000 square feet, bringing the first incubator space to the Seaport and expanding the company s footprint out of Cambridge. Innovation Square will total 375,000 square feet across two phases, bringing premier lab space to the marine industrial park area of the Seaport. Ginkgo Bioworks expands further in 27 Drydock, growing its footprint to 99,000 square feet. Ginkgo has secured over $430 million in funding, including their most recent round of $275 million at the end of 2017 giving them a valuation of over $1 billion. As new lab construction makes headway in the Seaport, many companies that either can t find space in or can t afford East Cambridge will seek this area as a viable option that is close to the city center, a growing list of amenities and public transit. Longwood Medical Area Best-in-class life sciences community Home to six of Boston s top 10 NIH-funded institutions, the LMA contains over 18 million square feet of clinical, research and administrative space within 213 acres. However, with a majority of buildings institutionally owned, there is limited rentable lab space. With tenants like Dana Farber, Boston Children s Hospital and Harvard Medical, the LMA is a crucial component of the success of Greater Boston s life sciences community. Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy Seaport District 1.4M s.f. 0 s.f. 5.2% 3.5% 2.5 ppts Longwood 1.1M s.f. 1.7M s.f. 10.4% 1.4% -3.1 ppts # of large blocks over 50,000 s.f. 1 0 Under construction (s.f.) 375,000 s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) Recent activity Mass Innovation Labs 6 Tide St. Seaport 53,917 s.f. Ginkgo Bioworks 27 Drydock St. Seaport 66,906 s.f ,934 s.f. $65.00 p.s.f. +4.8% 0 0 s.f. $70.00 p.s.f. +2.6% Innovation Square Related Beal Seaport 375,000 s.f. Activity key: Leasing Sales Under construction Large blocks of space

22 22 Chicago Chicago has been ranked on Genetic Engineering and Biotechnology News list of Top 10 U.S. Biopharma Clusters for three years in a row. The biopharmaceutical industry in Chicago is an immediate market for medical device manufacturers. Chicago has six world-renowned schools of medicine, the largest concentration of physicians and two major federal research labs. The Chicagoland area has over 30 teaching hospitals that drive its competency in the biopharmaceutical industry. Major lab supply: Clusters of established lab stock with long-time industry presence Emerging lab supply: Areas with limited lab stock today that are poised for growth Life Sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device & instrument Chicago Metro Dominating Chicago s life sciences industry are large publicly traded multinationals, such as Baxter International, Abbott Laboratories and Horizon Pharma, as well as the federal government, which maintains a significant footprint with two research sites, Argonne National Laboratory in Woodridge and Fermi National Accelerator Laboratory in Batavia. In addition, Chicago hosts a number of world-renowned academic institutions contributing to scientific research and benefits from the 23-acre Illinois Science & Tech Park in Skokie that focuses on emerging biosciences. Chicago provides excellent testing grounds for innovative medical research through its number of hospitals including Rush University Medical Center, University of Chicago Medical Center and Northwestern Memorial Hospital. The majority of these users own their Chicago facilities, clustering within suburban campuses, and therefore minimally impacting the local leasing market. Suburban North Shore Chicago s north shore submarkets in Cook County and Lake County are home to R&D-heavy firms. Lake County continues to drive Chicago s life sciences cluster with more than 100 biotechnology/pharmaceutical companies, including 10 corporate headquarters. Employees at biopharmaceutical firms earn nearly 50 percent more than the overall average wage in Lake County.

23 Scorecard Economic 23 Companies in the life sciences sector are attracted to Chicago s high-quality universities and extensive transportation network. Funding from venture capital and the National Institutes of Health has not showed any signs of slowing down. NIH funding has increased by 3.0 percent year-over-year. Cluster score: 35.4 Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 52, % -1.9% Establishments 1, % -0.9% Funding Total life sciences % To total U.S. VC funding $271.1M 1.4% NIH funding $727.5M 2.8% Average asking Inventory Total supply % Total vacancy rent (NNN) 8.8M s.f. 3.4% $14.05 p.s.f. Chicago benefits from a highly skilled workforce from some of the country s top universities. This educated workforce has pushed growth in life sciences employment, up 1.1 percent year-over-year. In metro Chicago, 14.4 percent of adults aged 25 years or older have a graduate degree. In Lake County, the figure is 18.3 percent. Life sciences employment composition 16% 8% 9% Life sciences employment 52,668 21% 30% 16% non-lab using lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories Research & development Medical & diagnostic laboratories Life sciences establishment composition Chicago is home to multi-national and local life science occupiers who provide a diverse pool of establishments. Chicago s highway and rail network provide connectivity to the rest of the region and country for medical supply and electromedical instrument manufacturers. 19% 5% 20% Pharma & Medicine MFG 17% Electromedical Instrument MFG Life sciences establishments 1,450 13% 26% Medical Equipment & Supplies Testing Laboratories R&D Medical & Diagnostic Laboratories

24 24 Denver With college graduates at 42.4 percent and high school graduates at 90.9 percent, Colorado has one of the nation s most highly educated workforces. A consistent, high flow of past in-migration has boosted the workforce from which companies can recruit. Access to numerous higher education and research facilities, which boast ample bioscience infrastructure, allows the Denver metro to act as an incubator for various life sciences startup companies. Longmont 25 Boulder 36 Lafayette Broomfield Brighton Northwest 76 Westminster Northeast Commerce Arvada City West CBD Midtown 70 6 Lakewood Southeast 85 Aurora Southeast Suburban Southwest Suburban Centennial Major lab supply: Clusters of established lab stock with longtime industry presence Emerging lab supply: Areas with limited lab stock today that are poised for growth Life sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device and instrument Boulder/Northwest The Boulder and Northwest submarket cluster comprises 69.7 percent of Denver Metro s inventory for lab space and is considered among the top two life sciences clusters in the entire region. Product in this cluster is comprised primarily of second-generation lab space and flex/office-to-lab conversion space. The majority of tenant requirements in this area are small, falling in the 5,000- to 15,000- square-foot range. SE/Southeast Suburban The Southeast and Southeast Suburban submarkets are home to 11.4 percent of Denver s lab space. Although these submarkets are not the most active within the life sciences industry, the area is home to the Fitzsimons Life Science District and Anschutz Medical Campus considered to be the epicenter of Colorado s growing bioscience community. Here, many startups benefit from shared creative and incubator space while in growth mode. West Suburbs/Southwest Suburban The West and Southwest Suburban submarkets encompass 18.9 percent of the market s lab space. Within these submarkets, space tends to be both second-generation lab space and flex/office-to-lab conversion product. Tenant requirements in these submarkets are smaller in size, typically ranging from 2,500 to 10,000 square feet.

25 Scorecard Economic 25 Users and real estate professionals alike often compare the search for appropriate lab space in Denver to finding a needle in a haystack. Existing, in-place infrastructure in lab buildings is extremely scarce, so life sciences companies will often use secondgeneration restaurant space or clean tech space. Oftentimes, smaller users must opt to share lab space. Cluster score: 35.5 Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 27, % 1.2% Establishments 1, % 3.5% Funding Total life sciences % to total U.S. VC funding $315.4M 1.6% NIH funding $357.2M 1.4% Average asking Inventory Total supply % Total vacancy rent (NNN) 6.0M s.f. 15.5% $13.26 p.s.f. Across the board, nearly all sectors of the life sciences industry are growing in Denver. This is most notable in the pharmaceuticals sector, which has experienced employment contraction in two of the past five years. The sheer amount of time and capital required to turn a profit, coupled with a challenging regulatory environment, have been factors in regional companies choosing to consolidate. Life sciences employment composition 34% 13% 5% 6% Life sciences employment 27,995 17% 25% non-lab using lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories Research & development Medical & diagnostic laboratories Incubators and startups tend to thrive in Colorado, but lack of space and funding often pushes these companies out once they become established. Although growing, access to capital and reinvestment for life sciences companies in Colorado still pales in comparison to coastal states. Oftentimes, these more established markets siphon not only funding but companies and talent as well from Colorado. Life sciences establishment composition 7% 22% 10% Pharma & medicine MFG Electromedical instrument MFG 34% Life sciences establishments 1,231 12% 15% Medical equipment & supplies Testing laboratories R&D Medical & diagnostic laboratories

26 26 Boulder/Northwest Boulder/Northwest Lack of functional supply limiting new deals The Boulder/Northwest submarket cluster encompasses the cities of Broomfield, Boulder, Lafayette, Louisville, Westminster and Longmont and is home to the University of Colorado at Boulder. Through 2017, Boulder and Broomfield counties combined to represent the largest share of medical device and diagnostics (engineering, researching, designing and ) employment in the nine-county region, accounting for one in three jobs for this subsector. Pharmaceuticals and biotechnology employment is up 1.7 percent year-over-year, but down since In 2017, the cluster recorded 143,642 square feet of positive absorption, but has experienced negative 56,790 square feet of net absorption year-to-date During the last 12 months, this market has tightened further, with vacancy rates trending downward and settling at 17.8 percent currently. Available options for users seeking lab space are believed to be notably tighter than the recorded vacancy rate figure. Longmont and Gunbarrel are low-cost alternatives with access to the Boulder workforce. Longmont has a supply of flex and light industrial buildings that have in-place infrastructure to convert to lab space. Looking forward, expect increased absorption, largely reflecting the physical occupancy of users who have inked deals in the past several quarters. Leasing-market momentum may be curbed somewhat, however, on account of a lack of functional space. Landlord-favorable conditions remain in the cluster, with no change expected through the remainder of the year. Facilities scorecard Supply Boulder Northwest Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy 1.8M s.f. 0.8M s.f. 44.0% 22.0% +0.7 ppts 1.4M s.f. 0.09M s.f. 25.7% 10.6% -205 ppts # of large blocks over 50,000 s.f. 1 0 Under construction (s.f.) 0 s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) Recent activity Muse Biotechnology, Inc Central Ave. Boulder 17,881 s.f. Class C DMC Biotechnologies, Inc th St. Boulder 4,230 s.f. Class B 5 550,000 s.f. $17.08 p.s.f. +3.9% 5 550,000 s.f. $12.51 p.s.f. +3.0% 2452 Clover Basin Drive Boulder/Longmont 460,000 s.f. Class B Swisslog Circle Point Road Northwest 29,731 s.f. Activity key: Leasing Sales Under construction Large blocks of space

27 27 SE/Southeast Suburban SE/Southeast Suburban Anchoring CO s life science cluster with Fitzsimons Campus Located at the southeastern quadrant of Denver metro, it boasts the Fitzsimons Life Science District and Anschutz Medical Center, both with lab-ready space. Together, these two areas comprise one of the largest bioscience developments in the entire United States. Upon completion, the campus will boast one of the nation s most preeminent and concentrated collaborations of patient care and researchlearning centers. Home to the University of Colorado Hospital, the University of Colorado Denver s Health Science Schools and Children s Hospital. Already, more than 16,000 people work within the District; plans estimate a total workforce in excess of 45,000 that will include professions in teaching, patient care and biotech research and development. The SE and Southeast Suburban submarkets combined for -8,132 square feet of negative net absorption during 2017 and 17,952 square feet of positive net absorption during year-to-date 2018, leading to vacancy decreasing 2.2 percentage points to 11.0 percent. Rental rates in the submarkets are currently at $18.00 and $10.37 per square foot NNN marking upward movement in the Southeast Suburban. Historically, tenants have held the upper hand in negotiations here, and this is expected to remain the case in the foreseeable future. Typical users include startups occupying shared, creative and incubator space throughout their growthmode phase. As more VC funding finds its way into the vicinity during the second half of the year, expect an increase in likekind occupiers to seek space as near to Fitzsimmons and Anschutz as operating budgets will allow. Looking forward, much of the currently vacant space will need to be absorbed before any further new development will commence. District will continue to put Denver on the map of U.S. top markets for life sciences in the years ahead. Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy SE 0.2M s.f. 0.09M s.f. 4.2% 0.0% 0.0 ppts Southeast Suburban 0.4M s.f. 0.03M s.f. 7.2% 17.5% -2.2 ppts # of large blocks over 50,000 s.f. 0 0 Under construction (s.f.) 0 s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) Recent activity University of Colorado Health 7000 E. Belleview Ave. Southeast Suburban 3,979 s.f. Class B NovaMed 799 E. Hampden Ave. SE 2,439 s.f. Class B Activity key: 6 38,500 s.f. $18.00 p.s.f. 0.0% Leasing Sales Under construction Large blocks of space ,220 s.f. $10.37 p.s.f. 0.0% Cendant Stem Cell Center 6501 E. Belleview Ave. Southeast Suburban 1,946 s.f.

28 28 West/Southwest Suburban West/Southwest Suburban Submarket has gained momentum with new tenants The West and Southwest Suburban submarkets are largely aligned within the Jefferson County boundaries. Long considered a leading area for bioscience with renowned research institutions and global companies, JeffCo boasts Colorado s second-highest concentration of medical device manufacturers at 29.5 percent. It is home to the Colorado School of Mines, where pioneering research is being conducted in the field of nano medicine and biofuel. Located in Golden, the National Bioenergy Center serves as the nation s central point of contact for bioenergy and bio-products with its state-of-the-art lab facilities spread across multiple federal agencies. Space tends to be both second-generation lab space and flex/office-to-lab conversion space, and as momentum has picked up over the last year, the West Suburbs are on the cusp of containing major lab supply. The cluster recorded 75,217 square feet of positive net absorption in 2017, but just negative 3,441 square feet of negative net absorption year-to-date Vacancy in the cluster is up 0.2 percentage points yearover-year and sits at 9.8 percent currently. Rental rates are currently $12.32 per square foot NNN in the West Suburbs, reflecting a 16.4 percent increase from the previous year. Despite strong growth, the submarket offers one of the lowest rates in the market. Rental rates are currently $10.95 per square foot NNN in the Southwest Suburbs, a 3.7 percent decrease from the previous year. Given the historically elevated vacancy rate in this cluster, the life sciences market pendulum has rested mostly with tenants for the past several years, but is tending to swing toward landlords as more space is absorbed. Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy West Suburbs 0.7M s.f. 0.2M s.f. 15.0% 9.1% -6.4 ppts Southwest Suburban 0.2M s.f. 0 s.f. 4.0% 12.3% +6.6 ppts # of large blocks over 50,000 s.f. 0 0 Under construction (s.f.) 0 s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) Recent activity Undisclosed Tenant W. Sixth Ave. Southwest Suburban 18,707 s.f. Class B 6 63,500 s.f. $12.32 p.s.f % 0 0 s.f. $10.95 p.s.f. -3.7% Activity key: Leasing Sales Under construction Large blocks of space

29 29 Houston Houston has long been a beacon for medical innovation and investment but has only recently begun to leverage that strength in science and technology. The majority of lab supply in the metro is clustered in or near the Texas Medical Center (TMC), the world s largest medical complex, where companies can leverage proximity to its 61 member institutions. TMC aims to make Houston the next frontier for life sciences through a new biomedical research hub called TMC 3. Currently, research which originates in Houston often leaves the metro for further development and production. With the creation of this collaborative campus, Houston will be wellpositioned to retain this life sciences capital. Jersey Village 45 Major lab supply: Clusters of established lab stock with longtime industry presence Emerging lab supply: Areas with limited lab stock today that are poised for growth 8 90 Missouri City Pearland 225 Pasadena Life sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device and instrument Houston Metro Houston s burgeoning life sciences sector has gained solid footing in the last several years, anchored by more than 1,400 life sciences companies and 15 academic institutions, including medical schools, pharmacy schools and even a high school focused on life sciences. Three of the metro s five largest employers are Houston Methodist Hospital, Memorial Hermann Health System and UT MD Anderson Cancer Center, each of which has dedicated lab and research space for advancing the future of medicine and health. Larger, national life sciences companies are spread across the metro, while much of the targeted clinical testing and research is focused around the TMC. Texas Medical Center With 50 million square feet of developed space, the TMC is the epicenter for advancing the future of life sciences in Houston. The TMC Innovation Institute is at the forefront, connecting industry entrepreneurs, academics and scientists to redefine the future of medicine and healthcare. The Innovation Institute includes incubator programs TMCx, TMCx+, TMC Biodesign, Johnson & Johnson JLABS and the AT&T Foundry to advance companies at any stage of idea, product or device development.

30 Scorecard Economic 30 Houston continues to make workforce gains, recording year-over-year growth in both life sciences employment and number of establishments. VC funding also increased dramatically, from $19.8 million in 2016 to $86.6M in NIH funding was down on the whole this year, and Houston s funding declined by half to $225.4 million. The University of Texas System and Baylor College of Medicine are the prime NIH benefactors, receiving more than 90 percent of the funds. Cluster score: 27.9 Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 29, % 2.1% Establishments 1, % 3.2% Funding Total life sciences % to total U.S. VC funding $86.6M 0.44% NIH funding $225.4M 0.86% Average asking Inventory Total supply % Total vacancy rent (NNN) 2.2M s.f. 6.0% $23.00 p.s.f. Houston benefits from a highly skilled workforce, drawn to the world s largest medical concentration and emerging innovation complex. In fact, one in nine Houstonians works in a healthcare-related field. Distilling into life sciences, the sector has a diverse employment composition, which increased 2.1 percent overall from last year. Life sciences employment composition 20% 19% 8% Life sciences employment 29,872 28% 21% 4% non-lab using lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories Research & development Medical & diagnostic laboratories Medical and diagnostic labs, research and development, and testing labs account for almost 75 percent of the life sciences establishments in the metro. Some of Houston s largest life sciences companies by employment include Alcon Laboratories, Pall Corporation and Becton, Dickinson and Company. Life sciences establishment composition 27% 24% 3% Life sciences establishments 1,404 13% 23% 10% Pharma & medicine MFG Electromedical instrument MFG Medical equipment & supplies Testing laboratories R&D Medical & diagnostic laboratories

31 31 Houston TMC Current Venture Fund and Innovation Institute The TMC Venture Fund, announced in the fall of 2017, is a $25 million commitment to support medical technologies and early-stage life sciences companies. The first five companies to benefit from the new fund are Alleviant Medical, Briteseed, CNSDose, Medable and Noninvasix. The TMC Innovation Institute is a 100,000-square-foot, cutting-edge facility that has raised $157 million in total funding and has five diverse programs to foster new solutions for healthcare. Johnson & Johnson s launch of JLABS at the Innovation Institute has proven enormously successful, with 51 resident companies, 25 of which are actively involved in drug development. Facilities scorecard Supply TMC Metro Houston Rentable lab stock (% of total lab stock) Total vacancy 1.8M s.f. 80.7% 7.5% -0.5 ppts 2.2M s.f % 6.0% -0.5 ppts # of large blocks over 50,000 s.f. 1 1 Under construction (s.f.) 0 s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) 5 50,000 s.f. $23.00 p.s.f. +3.0% 5 50,000 s.f. $23.00 p.s.f. +3.0% TMC Future TMC 3 With the goal of establishing a third coast for life sciences, TMC 3 was born as a biomedical research hub to unite researchers and experts together on a 30-acre, 1.5 million-square-foot campus. The founding institutions, Baylor College of Medicine, the University of Texas Health Science Center, the University of Texas MD Anderson Cancer Center and Texas A&M University Health Science Center signed on with the purpose of advancing human health. TMC 3 is expected to break ground in 2019 and finish construction in It is projected to generate a $5.2 billion economic impact in the state of Texas and create 30,000 jobs. The implications of this announcement are industryaltering for the Houston life sciences industry, not the least of which is keeping the sector s intellectual capital and nascent companies firmly planted in Houston. Recent activity Lonza America, Inc Kirby Drive South 276,770 s.f. Buyer: Zeller Realty Group Seller: Pinchal & Company Agilvax, Inc. JLABS TMC Innovation Institute TMC New resident company Activity key: Leasing Sales Under construction Large blocks of space Life Science Plaza 2130 W. Holcombe Blvd. TMC 70,899 s.f. sublet NeoGenomics 7256 S. Sam Houston Parkway West Southwest 21,857 s.f. expansion

32 32 Long Island In an effort to help catalyze bioscience research momentum, New York State announced plans to provide $72.0 million of funding for three proposed medical facilities on Long Island. The funds will allow for Long Island University to open the only veterinarian medicine college in the metropolitan area. Broad Hollow Bioscience Park, located on the campus of Farmingdale State College, has a 62,000-square-foot facility available for occupancy. The space is ideal for a company seeking a corporate research facility. 25A Major lab supply: Clusters of established lab stock with longtime industry presence Huntington 25A Hauppauge Emerging lab supply: Areas with limited lab stock today that are poised for growth Hempstead Freeport 111 Bayshore 27 Life sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device and instrument Nassau County Recognized for its world-class research institutions, the Nassau County bioscience industry presence continues to be a major source of economic growth on Long Island. The life sciences industry is poised for sustained growth as innovation-focused funding from the state solidifies groundbreaking bioscience initiatives and research projects. Nassau County serves as headquarters to Cold Spring Harbor Laboratory, a 125-year-old biomedical nonprofit laboratory, and is home to many lab-based companies, such as Mirimus and Certerra. Great Neck based Northwell Health, the largest private-sector employer on Long Island, is expanding rapidly along with its research wing, the Feinstein Institute for Medical Research. The Nassau County life sciences market is mainly composed of owner-occupied laboratory facilities. Suffolk County Stony Brook University serves as an integral part of the research corridor initiative of Long Island. The National Institutes of Health awarded Stony Brook University s Center for Biotechnology a three-year, $3.0 million grant to create the Long Island Bioscience Hub in collaboration with two key partner institutions. Suffolk County is also home to Brookhaven National Laboratory, a 4 million-square-foot multipurpose research lab facility funded by the U.S. Department of Energy. The majority of life sciences establishments are in owneroccupied facilities in a campus setting. In recent years, pharmaceutical companies have dominated commercial activity growth, with the majority concentrated in Central Suffolk.

33 Scorecard Economic 33 The strengthening of the Long Island research corridor has been steered by several efforts to accelerate the commercialization of bioscience resources, primarily through the Long Island Bioscience Hub. Through a partnership of renowned institutions, Stony Brook University, Brookhaven National Laboratory, Cold Spring Laboratory, and Feinstein Institute for Medical Research adjoin their research expertise to foster the development of new discoveries. Cluster score: 23.2 Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 28, % -2.2% Establishments % -0.2% Funding Total life sciences % to total U.S. VC funding $18.8M 0.1% NIH funding $144.5M 0.6% Average asking Inventory Total supply % Total vacancy rent (NNN) 1.7M s.f. 6.6% $21.50 p.s.f. An initiative that leverages Long Island s extensive research expertise was recently put into motion, led by a partnership between the Center for Biotechnology and Accelerate Long Island. The Long Island BioMentor Initiative aims to foster a more vibrant bioscience cluster in the region by connecting early-stage bioentrepreneurs with highly distinguished professionals and experienced mentors. Life sciences employment composition 29% 13% Life sciences employment 28,074 6% 17% 35% non-lab using lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories Research & development Medical & diagnostic laboratories Employment growth on Long Island depends heavily on the biomedical and health services industries, a trend emerging only within the past decade. According to the Long Island Index, biomedical and health services employment grew by 12.0 percent and 10.0 percent, respectively, since Life sciences establishment composition 36% 15% 14% Life sciences establishments % 1% 20% Pharma & medicine MFG Electromedical instrument MFG Medical equipment & supplies Testing laboratories R&D Medical & diagnostic laboratories

34 34 Long Island Nassau County State aims to propel job creation through research funding The state announced its plans to allocate $30.0 million each to the Center of Bioelectronic Medicine at the Feinstein Institute for Medical Research and Cold Spring Harbor Laboratory. Northwell Health s initial plans to move part of its Institute for Medical Research to the Nassau Hub will now be located in Manhasset. The new bioelectric medicine center will add 56 scientists. The state s Start-Up NY tax-free zones program accepted two new Huntington-based technology startups. ProtiFi and Haystack Diagnostics LLC will be moving to the vacant business incubator at Farmingdale State College. The sole large block of lab space remaining in Nassau County is the 62,000-square-foot facility at Broad Hollow Bioscience Park, located on the campus of Farmingdale State College. Suffolk County Pharma sector remains active despite dearth of large blocks The pharmaceutical sector plays an increasingly integral role in economic activity on Long Island, particularly in the Hauppauge region, where a majority of pharma companies are based. However, a lack of large available blocks of space on the Island has hindered significant absorption of lab stock. The 800-basis-point decrease in vacancy since 2017 was primarily driven by American Regional Health s purchase of the facility at 45 Adams Avenue, which was previously owned by Forest Laboratories. The company was formed by MTC Industries, which focuses on research development of natural ingredients. The construction of a 260,000-square-foot facility is still under way at 275 Carleton Avenue in Central Islip. The build-to-suit property is being constructed for two Hauppauge-based companies, InvaGen Pharmaceuticals and AlphaMed Bottles. Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy Vyaire American Regional Health Adams N Riverwoods Ave. Boulevard Hauppauge North 28,000 Lake s.f. County 96,000 Class Bs.f. Nassau County Suffolk County 0.6M s.f. 0.2M s.f. 65.0% 9.6% -5.2 ppts 0.3M s.f. 0.4M s.f. 35.0% 1.0% -8.0 ppts # of large blocks over 50,000 s.f. 1 0 Under construction (s.f.) 0 s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) Recent activity Invagen Phamaceuticals 275 Carleton Ave. Central Islip 260,000 s.f. Expected delivery: 2018 Activity key: 0 100,000 s.f. $18.00 p.s.f % Leasing Sales Under construction Large blocks of space 2 250,000 s.f. $25.00 p.s.f. 0.0% Broadhollow Bioscience Park Farmingdale 62,000 s.f. $22.00 NNN

35 35 Los Angeles/Orange County The Los Angeles/Orange County life sciences industry is responsible for more than $27.3 billion in annual economic activity and employs more than 122,000 people. The metro is a leader in patent generation but must better partner with the private sector to commercialize research regionally. There are more than 25 research institutes, universities and colleges in the region that conduct research and train future generations of scientists and entrepreneurs. This, coupled with the prevalence of leading biotech companies in the market, positions this cluster as a major industry player. Major lab supply: Clusters of established lab stock with longtime industry presence Emerging lab supply: Areas with limited lab stock today that are poised for growth Life sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device and instrument Los Angeles Spread among West Los Angeles, South Bay, Los Angeles North, San Gabriel Valley and the Santa Clarita Valley submarkets, the Los Angeles life sciences clusters are typically centered near leading educational or large biotech firms. Leading private research institutions, such as Cedar Sinai Medical Center, the City of Hope National Medical Center and Huntington Medical Research Institute, are located in the Los Angeles Basin. Two of the five University of California campuses with medical schools are located in the Los Angeles/Orange County market: UCLA and UC Irvine. In addition, the region is home to major research universities. These include UC Santa Barbara, Cal Tech and the University of Southern California (USC). Orange County Life sciences companies are located throughout Orange County, with the largest clusters located in the airport area and South County. Primary research institutions located in Orange County include Children s Hospital of Orange County, St. Joseph Hospital of Orange, University of California Irvine (UCI), St. Jude Medical Center and Hoag Hospital Newport Beach. Expansion in healthcare firms and available venture capital has spurred significant growth in local biotechnology and medical device firms.

36 Scorecard Economic 36 The Los Angeles/Orange County region is home to a diversified life sciences cluster characterized by large pharmaceutical companies and smaller biotech incubators. The sector is supported by well-funded academic and research institutions. The University of Southern California and CalTech attracted $693.0 million from the National Institutes of Health in Cluster score: 42.8 Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 122, % 1.0% Establishments 3, % 3.4% Funding Total life sciences % to total U.S. VC funding $479.1M 2.4% NIH funding $1,165.9M 4.5% Average asking Inventory Total supply % Total vacancy rent (NNN) 7.9M s.f. 4.6% $16.47 p.s.f. The region s life sciences cluster has been a strong driver of job growth since the 2007 recession. Factors driving employment are medicalbased companies entering the Los Angeles/Orange County market as well as companies currently based there and expanding operations. Life sciences employment composition 20% 13% 10% Life sciences employment 122,012 31% non-lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories 5% 21% lab using Research & development Medical & diagnostic laboratories Testing laboratories represent a strong growth opportunity. The Los Angeles and Orange County area is one of the largest metropolitan regions in the country. As the area s population ages, the demand for testing services will only increase. Life sciences establishment composition 26% 25% 5% Life sciences establishments 3,160 10% 13% 21% Pharma & medicine MFG Electromedical instrument MFG Medical equipment & supplies Testing laboratories R&D Medical & diagnostic laboratories

37 37 Los Angeles/Orange County Los Angeles Incubators driving the demand for space The market s lab inventory is controlled by large established firms such as Amgen, Kite Pharmaceuticals and Quest Diagnostics. Early-stage companies are also increasingly a significant part of the landscape, with nearly 50 of the 100 biotech companies headquartered locally operating out of incubators. Pasadena Bio Collaborative Incubator, which provides laboratory space and supports 20 life sciences companies, announced plans to expand under the appointment of a new CEO. Incubators will continue to provide a bridge between academic research and commercial development supported by an abundance of capital and local talent. Facilities scorecard Supply Los Angeles Orange County Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy 4.6M s.f. 0.9M s.f. 58.2% 4.5% +0.2 ppts 3.3M s.f. 2.3M s.f. 41.8% 4.8% -0.6 ppts # of large blocks over 50,000 s.f. 6 2 Under construction (s.f.) 0 s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) ,386 s.f. $16.68 p.s.f % 6 550,000 s.f. $16.20 p.s.f. +5.5% Orange County Growth in life sciences pushing space demand to outstrip supply The Orange County lab inventory is spread across industrial, flex and office properties, with 48 percent coming from flex, 30 percent industrial and 22 percent office. Some of the largest life sciences firms are located in Orange County, including Alcon Research, Allergan, Applied Medical Resources, B. Braun Medical, Beckman Coulter and Edwards Lifesciences. These companies have a combined total of over 12,000 Orange County employees. With growing demand from the healthcare industry for further research and development from life sciences firms, Orange County is experiencing strong expansion in this field. Tenant requirements are greater than available space, which is putting upward pressure on rents. As demand rises for further industry advancements, life sciences will continue to be a vital component of the Orange County economy. Recent activity NantWorks 202 N. Nash St. El Segundo 111,238 s.f. Vyaire 510/520 Technology Drive Irvine 184,800 s.f. Activity key: Leasing Sales Under construction Large blocks of space Davita Medical Management Services Torrance 80,583 s.f. Class B B. Braun Medical 1200 Valencia Ave. Tustin 125,500 s.f. Class B

38 38 Suburban MD Home to the headquarters of the NIH, the FDA and NIST, Suburban Maryland consistently ranks among the top biopharma clusters in the United States. The state of Maryland captured 63 percent of total contract awards distributed by the National Institutes of Health and U.S. Food and Drug Administration last year, for a total of $4.2 billion. Frederick Submarket Major lab supply: Clusters of established lab stock with longtime industry presence 270 I-270 Corridor Submarket Emerging lab supply: Areas with limited lab stock today that are poised for growth 270 Bethesda Life sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device and instrument Suburban Maryland The Suburban Maryland cluster within Metro DC is distinctive in that it sources the vast majority of its intellectual resources from the federal government. Contract awards originating from the National Institutes of Health (NIH) and the U.S. Food and Drug Administration (FDA) have helped, and continue to help, drive the area s life sciences market. Though growth among Suburban Maryland s life sciences sector was limited between 2004 and 2013 due to a string of homegrown companies being acquired by larger life sciences groups from outside of the region, investments by established life sciences players and private-equity firms are helping drive growth today. Over the last year, life sciences companies and private-equity firms have helped spur more than $418 million in VC funding. Gaithersburg-based VielaBio raised $250 million in Series A funding, while Sirnaomics recently secured $25 million in Series C funding from various foreign funds and NexImmune raised $23 million in Series A funding. While traditional suburban office product has seen elevated vacancy levels across Suburban Maryland due to a limited amenity base and transit accessibility, proximity to talent, funding and a strong educational system have all enabled growth in the area s life sciences sector along the I-270 Corridor and into Frederick County.

39 Scorecard Economic 39 Proximity to a highly educated workforce, superior infrastructure and contract awards flowing from the federal government continue to drive new demand in Suburban Maryland. Since last year, venture capital funding grew by over $360 million, or over 700 percent, while NIH funding grew by over $170 million, or over 30 percent. Cluster score: 52.7 Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 41, % 4.6% Establishments 1, % 2.0% Funding Total life sciences % to total U.S. VC funding $418.1M 2.1% NIH funding $706.5M 2.7% Average asking Inventory Total supply % Total vacancy rent (NNN) 9.9M s.f. 5.0% $24.35 p.s.f. Aided in part by strong educational institutions such as Johns Hopkins, University of Maryland and a number of others, Suburban Maryland continues to benefit from a highly educated workforce. Life sciences employment across Suburban Maryland has increased by 35 percent year-over-year, while lab-using occupations continue to make up over 80 percent of life sciences employment. Life sciences employment composition 13% 68% 9% Life sciences employment 41,322 6% 2% 2% non-lab using lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories Research & development Medical & diagnostic laboratories Previously heavily comprising research and development establishments, Suburban Maryland s life sciences base is beginning to diversify. Incubators, universities and VC funding are enabling new growth in addition to the traditional contract awards distributed by the NIH and FDA. Life sciences establishment composition 19% 5% 20% Pharma & medicine MFG 17% Electromedical instrument MFG Life sciences establishments 1,690 13% 26% Medical equipment & supplies Testing laboratories R&D Medical & diagnostic laboratories

40 40 Suburban MD I-270 Corridor Strong demand driving new growth in lab supply Over the last year, five 20,000-plus-square-foot, privatesector life sciences leases have been signed across the I-270 Corridor and Frederick County. Supernus Pharmaceuticals committed to relocating its headquarters and expanding by almost 50,000 s.f. into 119,000 s.f. The company has seen a tremendous increase in profits from drug sales and is in the process of advancing two candidates through phase 3 clinical trials. Lentigen will expand into 147,000 s.f., backfilling space being vacated by Novavax. Historical low vacancy levels have spurred plans for future lab supply development: 704 Quince Orchard Road will be converted into lab and office space, and StonebridgeCarras and Donohoe will develop a 175,000- s.f. lab building in the Bethesda CBD. This is a very large development, as Suburban MD has never had an urban vertical lab, which could change the game for this market to be more competitive against primary market peers. Frederick County Suburban Maryland s emerging life sciences market Fort Detrick, the Frederick National Laboratory for Cancer Research and higher education institutions within Frederick County, such as Mount Saint Mary s University, Hood College and Frederick Community College, continue to support the growth of new business throughout the county. Graduates from the Frederick Innovative Technology Center (FITCI) such as RoosterBio and Akonni Biosystems have introduced new venture capital funding to Frederick County, while large life sciences groups such as AstraZeneca, ThermoFisher Scientific and Lonza have continued to boost the area s standing as an emerging life sciences market. Facilities scorecard Supply I-270 Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy 8.9M s.f. 1.6M s.f. 86.5% 5.3% +1.3 ppts Frederick County 1.0M s.f. 615K s.f. 13.5% 2.3% +0.2 ppts # of large blocks over 50,000 s.f. 2 0 Under construction (s.f.) 55,000 s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) Recent activity Henry M. Jackson 6720 Rockledge Drive I-270 Corridor 168,000 s.f. Supernus Pharmaceuticals 700 Quince Orchard Road I-270 Corridor 118,834 s.f. Activity key: $25.94 p.s.f. +2.6% Leasing Sales Under construction Large blocks of space 7 622,000 s.f. $14.00 p.s.f. +3.4% Lentigen 1201 Clopper Road I-270 Corridor 147,051 s.f. Class B 930 Clopper Road I ,022 s.f. Class B $30.00 NNN

41 41 Minneapolis St. Paul Minneapolis St. Paul is the center of the Medical Alley corridor extending from Duluth to Rochester. In 2017, Minnesota life sciences companies raised $735 million from global investors, making it a record-setting year. This region hosts one of the world s most successful medical device clusters, a legacy that dates back to the early 20th century and the founding of the industry s grandfathers, 3M and Medtronic. 94 Northwest 694 Northeast Major lab supply: Clusters of established lab stock with longtime industry presence Minneapolis CBD 35W St. Paul CBD 94 Emerging lab supply: Areas with limited lab stock today that are poised for growth Southwest 494 Southeast Life sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device and instrument Northeast Life sciences companies occupy more than 6.2 million square feet of office, lab and space in the Northeast submarket; more than 87 percent of this space is owner-occupied. Prominent global corporations such as 3M, Medtronic and St. Jude Medical are all headquartered here, as is the University of Minnesota. The University Enterprise Laboratory was the first multitenant lab building in the Twin Cities. Incubology, a biotech incubator at the former Imation campus, now offers 80,000 square feet of lab and 200,000 square feet of office space. Northwest A deep and talented pool of life sciences workers and a strong cluster of life sciences companies occupy more than 4.2 million square feet of office, lab and space. Notable companies with a presence include Baxter, Boston Scientific, Olympus Surgical Technologies America and Upsher-Smith. Southwest Life sciences companies occupy more than 2.3 million square feet of office, lab and space in the Southwest market. Major Southwest occupiers include Starkey Hearing Technologies, Beckman Coulter, Bayer CropScience and American Medical Systems.

42 Scorecard Economic 42 Minneapolis St. Paul s life sciences strength started with medical devices, but for decades the economic cluster has been diversifying into other emerging industries, such as digital health, biotechnology, pharmaceuticals and diagnostics. This unique mix plus proximity to Rochester s Mayo Clinic makes the Twin Cities one of the most diverse healthcare innovation hubs in the world. Talent truly differentiates Minneapolis St. Paul from the rest of its life sciences peers. The metro is one of the most educated in the nation and consistently has one of the lowest unemployment rates. Private-sector and institutional research foster a uniquely innovative health tech cluster, evidenced by Minnesota s unprecedented number of patents per capita. Life sciences job counts steadily grow every year, driven by a balanced mix of startups, relocations and large well-established life sciences companies. Cluster score: 34.0 Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 46, % 1.8% Establishments % -0.1% Funding Total life sciences % to total U.S. VC funding $455.5M 2.3% NIH funding $298.7M 1.1% Average asking Inventory Total supply % Total vacancy rent (NNN) 0.6M s.f. 50% $18 $22 p.s.f. Life sciences employment composition 5% 30% 4% 11% 1% Life sciences employment 46,065 49% non-lab using lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories Research & development Medical & diagnostic laboratories The region is a leader in cardiovascular technologies, complex urological devices and complex neurology devices including the emerging neuromodulation device market. Minnesota is first nationally in premarket approvals (PMAs) in these fields, which means that companies can get their products to market faster than anywhere else. Life sciences establishment composition 22% 11% 6% 4% Life sciences establishments % 22% Pharma & medicine MFG Electromedical instrument MFG Medical equipment & supplies Testing laboratories R&D Medical & diagnostic laboratories

43 43 Montréal Montreal is a major North American center for the life sciences industry. More than 400 companies employing over 29,000 skilled workers are engaged in basic research,, biotechnology, contract research and medical technology. Montreal has two major research universities, Université de Montréal and McGill, both with brand-new, ultramodern affiliated research hospitals and numerous research centers. Terrebonne Sainte-Rose 40 Major lab supply: Clusters of established lab stock with longtime industry presence Longueuil Emerging lab supply: Areas with limited lab stock today that are poised for growth Pointe-Claire Life sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device and instrument West-Island/Saint-Laurent This cluster comprises three hubs along Highway 40: Technoparc Montréal, NEXUS and the West End. Manufacturing facilities are concentrated in the West End, while NEXUS offers affordable office space. Technoparc is an integrated business park that hosts high-end facilities with mixed R&D, lab and office. All three hubs of the West-Island/Saint-Laurent submarket will soon be linked to Downtown Montreal through the REM light rail train currently under construction. Laval Laval Biotech hosts over 100 companies and 5,000 employees clustered within a 3-kilometer (2-mile) radius. Multinationals such as Roche, Sanofi and GSK operate alongside 11 research centers and organizations. Prime land is available for development and new businesses benefit from the municipal tax holiday program. Downtown and Periphery Over Can$5 billion was invested to create brand-new, state-of-the-art facilities for the Centre hospitalier de l Université de Montréal (CHUM) and McGill University Health Centre (MUHC). The two super-hospitals are now fully operational.

44 Scorecard Economic 44 An exceptional life sciences ecosystem made Montreal the premier recipient of venture capital investment in Canada. Investments across 22 organizations throughout Montreal reached Can$305.5 million, which represents 28.7 percent of the Canadian total. Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 29, % 12.0% Establishments % Funding Total life sciences % to total Canada VC funding Can$305.50M 28.7% Average asking Inventory Total supply % Total vacancy rent (Net) 1.8M s.f. 18.0% $13.97 p.s.f. Montreal benefits from a highly skilled, multilingual workforce. Université de Montréal is ranked the best Frenchlanguage research university in the world, while McGill often earns the prime spot in annual Canadian rankings. Both institutions have affiliated research centers that specialize in areas such as bioinformatics, structural biology and self-assembled chemical structures. Life sciences employment composition 31% 11% Life sciences employment 29,100 11% 10% 37% non-lab using lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Research & development Medical & diagnostic laboratories Life sciences employment has been stable around 30,000 for the best of the past two decades; layoffs in pharmaceutical research were compensated by growth in other life sciences sectors. Life sciences establishment composition 19% 5% 20% Pharma & medicine MFG 17% Electromedical instrument MFG Life sciences establishments % 26% Medical equipment & supplies Testing laboratories R&D Medical & diagnostic laboratories

45 45 Montréal West-Island/Saint-Laurent New REM light rail to improve commuting Construction has begun on the REM light rail that will link the West-Island and Saint-Laurent to Downtown Montreal and the airport. Saint-Laurent s Technoparc hosts the Néomed institute, an open-access drug discovery hub that combines research and industrial expertise. Neomed is a publicprivate partnership funded by AstraZeneca, Pfizer, Janssen, GSK and the Quebec and federal governments. Abbott Canada leased 50,154 square feet at 8625 Transcanadienne. Laval More options for tenants Direct available space has reached 49,163 square feet, the highest level since Actelion, a Swiss company that specializes in orphan diseases, has leased 8,000 square feet at 3111 Saint- Martin West. The Quebec Center for Innovation in Biotechnology (CQIB) offers incubator services to startups and R&D projects of existing companies, soft landing to international companies, furnished level 2 bio-safety laboratories and a high-end pool of equipment. Downtown and Periphery New campus focuses on multidisciplinary research Université de Montréal is building a brand-new campus, the MIL, that will house research in new molecules, nanomaterials, living materials and scientific instruments. The MIL will be an extension of the Mile-Ex neighborhood, a hub for artificial intelligence (AI) and machine learning. Algorithme Pharma, Sunshine Biopharma and Pharmascience are all located near the MIL campus. Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy 1.5M s.f. 0.3M s.f. 100% 18.0% 4.8% # of large blocks over 50,000 s.f. 2 Under construction (s.f.) Demand # of requirements Total s.f. requirements Pricing Average asking rent (Net) Recent activity Abbott 8625 Transcanadienne Highway Saint-Laurent 50,514 s.f. Intellisyn 7220 Frederick-Banting Saint-Laurent 9,359 s.f. Activity key: Leasing Sales Under construction Large blocks of space 0 s.f ,586 s.f. $13.97 p.s.f. 0.5% Actelion 3111 Saint-Martin West Laval 8,000 s.f. Manuvie 7220 Frederick-Banting Saint-Laurent 20,000

46 46 New Jersey The pharmaceutical/life sciences industry has historically been one of New Jersey s leading economic engines. The state is home to the headquarters or major facilities for 13 of the largest pharmaceutical/life sciences companies in the world. The repurposing of large vacant life sciences campuses, including New Jersey Center of Excellence in Bridgewater, New York Center for Innovation in Pearl River, NY and ON 3 in Clifton/Nutley, are providing lab space opportunities for growing biotech companies. 287 Major lab supply: Clusters of established lab stock with long-time industry presence Bronx Queens 495 Emerging lab supply: Areas with limited lab stock today that are poised for growth 78 Brooklyn 95 Staten Island Life Sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device & instrument Northern New Jersey Northern New Jersey includes Bergen, Essex, Hudson, Morris and Passaic counties. The owner-occupied and leased R&D/lab inventory totals approximately 5.2 million square feet. Roche s former Clifton/Nutley research campus, rebranded ON3 following its acquisition by Prism Capital Partners in 2016, continued to generate headlines into Modern Meadow recently leased 72,900 square feet of existing space and 46,240 square feet of planned construction at ON3 after receiving state economic incentives to move its headquarters from Brooklyn. The biotech company will join the new Seton Hall- Hackensack Meridian School of Medicine on the campus, which is scheduled to welcome its first 60-student class in July Central New Jersey More than two-thirds of the R&D/lab space in the state is focused in Central New Jersey, which includes Hunterdon, Mercer, Middlesex, Monmouth, Somerset and Union counties. Totaling nearly 10.9 million square feet, more than 70.0 percent of this space is comprised of owner-occupied R&D/lab facilities used for research, and support operations. Most of the inventory is focused along the Route 1 corridor from North Brunswick south to Princeton, the Bridgewater area in Somerset County and Kenilworth/Summit in Union County. Several recently announced incubator/research space ventures within Central New Jersey are expected to foster the growth of new pharmaceutical and biotech companies.

47 Scorecard Economic 47 After trending lower during the past several years in response to consolidations and mergers among the larger pharmaceutical players, New Jersey s life sciences sector recorded a nearly 5.0 percent yearover-year gain, as its workforce numbered more than 79,500 people. Growing biotechnology and generic drug companies contributed to the recent employment uptick. The state s life sciences industry generated an estimated annual economic impact of nearly $50.0 billion. Cluster score: 40.1 Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 79, % 4.8% Establishments 1, % 2.3% Funding Total life sciences % To total U.S. VC funding $270.3M 1.4% NIH funding $228.7M 0.9% Average asking Inventory Total supply % Total vacancy rent (NNN) 16.1M s.f. 14.9% $19.99 p.s.f. Research & development focused companies accounted for more than one-third of New Jersey s life sciences employment composition. In 2017, 50.0 percent of new FDA drug approvals originated from life sciences companies with a presence in the state. The pharmaceutical and medicine sector comprised nearly one-quarter of the state s life sciences employment. Bristol-Myers Squibb, Johnson & Johnson, Merck, Novartis and Pfizer are among the state s well-known employers in this cluster. Life sciences employment composition 34% 14% Life sciences employment 79,508 6% 24% 13% 9% non-lab using lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories Research & development Medical & diagnostic laboratories Future growth within the state s life sciences sector will be fueled by smaller and mid-sized biotech and generic companies that are moving into the campuses vacated by the larger pharmaceutical players. Furthermore, talent recruitment will be a critical component needed to sustain these growing companies. The search for a highly educated labor pool will encourage life sciences companies to establish footprints in mass transitcentric urban areas like Jersey City, Newark and New Brunswick. Life sciences establishment composition 25% 27% 12% Life sciences establishments 1,742 10% 10% 16% Pharma & Medicine MFG Electromedical Instrument MFG Medical Equipment & Supplies Testing Laboratories R&D Medical & Diagnostic Laboratories

48 48 New Jersey Northern New Jersey Former Roche campus remains in the headlines Modern Meadow leased 72,900 square feet of existing space and 46,240 square feet of planned construction at ON3, the former Roche Clifton/Nutley research campus. The biotech company was awarded a 10-year, $32.3 million Grow New Jersey tax credit to move its headquarters from Brooklyn. Lonza America signed a lease expansion and extension totaling more than 77,000 square feet at 412 Mount Kemble Avenue in Morristown. The chemicals and biotechnology company will be vacating about 100,000 square feet in Allendale as part of this expansion. Central New Jersey Incubator spaces providing opportunities for startups Princeton University and BioLabs have developed a 31,000-square-foot incubator for high-tech startups needing access to lab space, while Celgene launched a 16,000-square-foot incubator and collaboration center on its Summit campus. In addition, the New Jersey Economic Development Authority (NJEDA) has repurposed a facility on its North Brunswick campus to support new pharmaceutical and biotech companies. Integra LifeSciences Corporation leased a 167,000- square-foot building at 1100 Campus Road in Plainsboro. The global medical technology company received a 10-year, $17.8 million state tax credit to relocate its operations within Middlesex County. Governor Phil Murphy announced his support of Devco s redevelopment project called The New Brunswick as a research and innovation campus for the state. The NJEDA approved an agreement with Devco to prepare a preliminary assessment and strategy study for the site, which is approved for more than 2.0 million square feet of office/r&d, retail and residential space. Facilities scorecard Supply Northern NJ Central NJ Rentable lab stock Owner occupied lab stock (% of total lab stock) Total vacancy 3.3M s.f. 1.9M s.f. 32.5% 33.5% -2.4 ppts 3.2M s.f. 7.7M s.f. 67.5% 6.0% -1.2 ppts # of large blocks over 50,000 s.f. 6 5 Under construction (s.f.) 0 s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) Recent activity Integra LifeSciences 1100 Campus Rd Central N.J. / Princeton 167,000 s.f. Lonza America 412 Mt Kemble Ave Northern N.J. / Route 24 77,048 s.f. expansion/extension Activity key: ,000 s.f. $22.15 p.s.f. -4-7% Leasing Sales Under construction Large blocks of space ,500 s.f. $18.90 p.s.f. +8.0% Bristol-Myers Squibb Princeton West Campus 311 Pennington Rocky Hill Rd Central N.J. / Princeton 1.15 m.s.f. R&D lab for lease/sale Vertice Pharma NJ Center of Excellence Central N.J. / Route 78 12,733 s.f. R&D/lab lease expansion

49 49 New York A world leader by most economic metrics, New York City historically has had severely limited life sciences inventory. Strong market fundamentals coupled with public-sector initiatives are bringing biotech to the forefront of growth in the city. 287 In 2016, the city announced a 10-year, $500 million commitment to advance the local life sciences ecosystem. Recent contributions from the NYCEDC include tax abatements, funding of incubator lab space, internship programs and public-private initiatives. In May, respondents submitted proposals for the $100 million applied life sciences campus hub in New York City. Major lab supply: Clusters of established lab stock with longtime industry presence Bronx Queens 495 Emerging lab supply: Areas with limited lab stock today that are poised for growth 78 Brooklyn 95 Staten Island Life sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device and instrument New York City While public initiatives have created a buzz around the local biotech market, economic fundamentals provide further evidence that the market can, and will, sustain increased life sciences investment in the coming years. New York City already has the largest concentration of academic medical centers in the country and receives approximately $1.6 billion in annual funding from the National Institutes of Health (NIH), second only to Boston/Cambridge. One of the most supply-constrained lab markets in the country, existing lab stock in Manhattan is effectively 100 percent leased. By city estimates, 3 million square feet of additional life sciences inventory is needed over the coming decade to accommodate expected industry growth.

50 Scorecard Economic 50 New York City is home to more than 7,000 university graduate students and postdoctoral researchers, offering a robust and continuous talent pool of future industry leaders. Initiatives such as the Brooklyn BioBAT s STEAM education program, which starts as early as pre-k, will also fuel the next next generation of life sciences leaders. New York City s direct access to capital as a leader in global finance and its rich talent pool contribute to its status as an ideal tenant destination. A diverse economic landscape and proximity to the booming tech sector have also created unique opportunities for innovation among life sciences tenants. There are more than 1,000 life sciences companies currently operating in New York City. Despite significant supply constraints in the local lab market, approximately two dozen such companies are started each year. Cluster score: 34.7 Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 14, % 2.4% Establishments 1, % 0.5% Funding Total life sciences % to total U.S. VC funding $309.1M 1.6% NIH funding $1,775.5M 6.8% Average asking Inventory Total supply % Total vacancy rent (NNN) 2.6M s.f. 21.0% $80.00 p.s.f.* Life sciences employment composition 34% 2% 4% 10% Life sciences employment 14,624 46% 4% non-lab using lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories Research & development Medical & diagnostic laboratories *Manhattan only Soon to open incubators and accelerators, such as JLABS at 101 Avenue of the Americas and New York BioLabs at 180 Varick Street, are just the most recent examples of the type of infrastructure that is being built in New York City to support this fastgrowing sector. Life sciences establishment composition 41% 2%3% Life sciences establishments 1,092 28% 21% 5% Pharma & medicine MFG Electromedical instrument MFG Medical equipment & supplies Testing laboratories R&D Medical & diagnostic laboratories

51 51 New York City Manhattan Manhattan developers beginning to respond to biotech demand At 619 W. 54th Street, Silverstein Properties and Taconic Investment Partners have invested $20 million to create the Hudson Research Center. The center already houses the New York Stem Cell Foundation and is among the only assets offering pre-built lab space. Over 100,000 square feet of availability is being marketed to both office and lab tenants. NYU Langone continues to grow in Manhattan and recently completed the Science Building at 435 E. 30th Street. The 16-story building will be fully occupied by NYU and will include 10 floors of lab space. Vornado s 767,000-square-foot project at the former Farley Post Office directly adjacent to Penn Station has begun marketing to life sciences tenants. This continues upon a theme of developers testing the demand waters for the life sciences in Manhattan, while somewhat hedging their bets by offering facilities that could cater to both lab and office uses. West Harlem A budding biotech district The Renzo Piano designed Jerome L. Greene Science Center in West Harlem is touted as the largest academic science building in New York City. Designed to foster collaboration and sharing among researchers, the center also includes a community wellness center and an education lab catered to local students. Another new project, One Harlem West, is an 11-story, 350,000-square-foot building catering to lab and life sciences users. The building is just two blocks from Columbia University and is evidence of the biotech cluster that is beginning to form in West Harlem. Facilities scorecard Supply Manhattan Brooklyn Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy 1.7M s.f. 388K s.f. 79.3% 6.2% +6.2 ppts 536K s.f. 0 s.f. 20.7% 78.0% ppts # of large blocks over 50,000 s.f. 2 2 Under construction (s.f.) 350K s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) Recent activity Pfizer 66 Hudson Blvd. Hudson Yards 792,000 s.f. Trophy (office) One Harlem West Harlem 350,000 s.f. Activity key: NA $ Leasing Sales Under construction Large blocks of space NA $25.00 (21.3%) BioBAT Brooklyn Army Terminal 417,900 s.f. Class B

52 52 Philadelphia Philadelphia ranked third in total National Institutes of Health (NIH) funding among cities in 2017, with 28 research organizations receiving 1,962 grants. The University of Pennsylvania was responsible for nearly half a billion dollars in funding by itself, comprising over 1,100 individual grants. Philadelphia outpaced two dozen other major markets in growing its share of highly educated adults, experiencing a 56 percent increase in advanced degree holders between 2008 and This surge in talent supports the life sciences ecosystem, which is seeing more startup activity. 1 Trenton Major lab supply: Clusters of established lab stock with longtime industry presence 276 King of Prussia 476 Emerging lab supply: Areas with limited lab stock today that are poised for growth Wilmington Philadelphia 76 University City Navy Yard Life sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device and instrument Philadelphia The Philadelphia market acts as a global anchor for the life sciences industry, boasting nearly 12 million square feet of life sciences real estate. Philadelphia s world-renowned academic institutions, centers of excellence for medicine, clusters of venture capital firms and a diversity of startups and mature corporations make for a resilient life sciences cluster. CBD (University City & The Navy Yard) Seventeen percent of the lab inventory exists within city limits, split between the Navy Yard, a life sciences and pharmaceuticals hub, and University City, where institutional groups are partnering to translate research into private-sector ventures. Suburbs (Route 202 Corridor, Bucks & Montgomery Counties) The Route 202 Corridor (extending from Exton, heading east through Malvern, and finally ending in King of Prussia) is home to 37.0 percent of the Philadelphia market s lab space. Bucks and Montgomery counties are the region s largest submarket on a square-footage basis, largely because Merck & Company occupies 3.6 million square feet, or 71.0 percent of the total supply. The large presences of several pharmaceutical companies account for most of the owner-occupied inventory.

53 Scorecard Economic 53 Companies in the life sciences sector are attracted to Philadelphia s large eds and meds sector centered in University City, where Children s Hospital of Philadelphia, the Hospital of the University of Pennsylvania and the Wistar Institute lead the way in NIH-funded research. This one submarket alone has grown to nearly 80,000 jobs and $1 billion in aggregate annual R&D expenditures. More than 5.7 million square feet of medical, research and academic buildings have been completed here since Cluster score: 54.2 Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 56, % 2.7% Establishments 1, % 2.4% Funding Total life sciences % to total U.S. VC funding $577.5M 2.9% NIH funding $979.2M 3.8% Average asking Inventory Total supply % Total vacancy rent (NNN) 12.8M s.f. 3.2% $30.00 p.s.f. Sources of local venture capital remain a concern for the regional startup industry. The limited number of local funds make it more difficult for firms to raise local cash, though the local incubator and VC infrastructure has certainly grown in recent years to begin to address this. The proximity and accessibility to the rest of the Northeast Corridor and its more active VC markets makes it likely and easy for local startups to raise money outside of the region. Life sciences employment composition 34% 11% Life sciences employment 56,452 6% 9% 26% 14% non-lab using lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories Research & development Medical & diagnostic laboratories Philadelphia s mix of major health systems, research universities and global pharmaceutical companies make it a compelling option for life sciences companies. More than 40 percent of the U.S. population lives within a day s drive of the city, and its airport is a hub for connections to European capitals, where many life sciences companies keep operations. This connectivity and the region s growing talent pool give it an edge in appealing to startups. Life sciences establishment composition 26% 34% 7% Life sciences establishments 1,640 13% 9% 11% Pharma & medicine MFG Electromedical instrument MFG Medical equipment & supplies Testing laboratories R&D Medical & diagnostic laboratories

54 54 Philadelphia City (University City & The Navy Yard) Rising rents creating uncertainty in city startup community The University City Science Center is planning to shut down 20,000 square feet of longtime lab space in buildings it owns at 3624 and 3711 Market Street as part of a shift in focus, through which it will outsource lab landlord services to its new partner, Cambridge Innovation Center (CIC). CIC s arrival into the market (where it is partnering with BioLabs to open and operate 22,000 square feet of lab within 3675 Market Street) brings with it replacement lab space for the 19 small companies currently in the Science Center, but at prices that leave many facing the choice to relocate outside of the city. The lack of any other viable lab options is a driving force behind the uncertainty facing these University City tenants, whose only other option is the recently delivered Pennovation facility. There is a substantial waiting list for spaces there, emphasizing the severe shortage of rentable options facing lab-focused tenants within city limits. Meanwhile, the Science Center is raising funds to expand its programming, seeded by a $1.1M gift from Wexford Science and Technology and the University of Pennsylvania. Suburbs (Route 202 Corridor, Bucks & Montgomery Counties) Suburban firms seeing growth O Neill Properties is under agreement to buy GSK s 2.2 million-square-foot facility and plans to offer leasable lab space there, citing regional demand and low inventory. Montgomery County based NMS Labs announced a headquarters relocation from Willow Grove to Horsham, where it will occupy a 100,000-square-foot facility to accommodate its rapid growth. Azzur Labs, a Lehigh Valley based firm serving the biopharmaceutical and medical device industries, announced a major lab reinvestment and expansion. Facilities scorecard Supply City Suburbs Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy 2.3M s.f. 466,000 s.f. 17.0% 3.3% 73.7 ppts 5.2M s.f. 4.9M s.f. 73.0% 6.7% 55.8 ppts # of large blocks over 50,000 s.f. 1 4 Under construction (s.f.) 345,000 s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) Recent activity NMS Labs 200 Welsh Road Montgomery County 155,000 s.f. $7 million acquisition, $10 million renovation Opertech Bio Pennovation Center 3401 Grays Ferry Ave. University City Activity key: 0 0 s.f. $38.00 p.s.f. 0% Leasing Sales Under construction Large blocks of space 0 0 s.f. $13.51 p.s.f. -6.8% GlaxoSmithKline 709 Swedeland Road 2,200,000 s.f. Montgomery County Class B $50+ million (estimated) Biorealize, ZSX Medical Pennovation Center 3401 Grays Ferry Ave. University City

55 55 Raleigh-Durham Raleigh-Durham, known as the Research Triangle region, is a magnet for those in the life sciences industry. More than 650 life sciences companies are located in the region, contributing to the innovative and collaborative environment Raleigh- Durham boasts. Raleigh-Durham is anchored by three Tier 1 universities Duke, UNC Chapel Hill and NC State University and is home to five other four-year colleges and universities. The concentration of higher education in the region produces more than 5,000 STEM graduates each year. Orange County 85 North Durham 6 Forks Falls of Neuse Major lab supply: Clusters of established lab stock with longtime industry presence South Durham Downtown Durham Glenwood/ Creedmoor Route 1 Emerging lab supply: Areas with limited lab stock today that are poised for growth 40 RPT/RDU Cary West Raleigh Downtown Raleigh 440 East Raleigh Life sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device and instrument Downtown Durham Downtown Durham, known for its innovative and collaborative ecosystem, is a favorite among life science tenants thanks to its proximity to Duke University. The Chesterfield, a redevelopment project in the submarket, delivered in 2017 and brought temporary relief to the tight submarket which has a vacancy rate of 2.2 percent. RTP/RDU RTP/RDU is home to the Research Triangle Park (RTP), one of the largest research parks in the United States. Founded in the 1950s, RTP gained momentum when IBM decided to build a 600,000-square-foot research facility in the 1960s. Since then, the submarket has grown to include industry giants such as Bayer CropScience, GlaxoSmithKline, LabCorp and Biogen. West Raleigh North Carolina State University and its Centennial Campus led the development of lab space in West Raleigh. The campus has become a core research-oriented micro-region. In addition to easy access to talent, the university facilitates corporate partnered research.

56 Scorecard Economic 56 Life sciences and biotechnology companies are attracted to Raleigh- Durham s top-notch higher education system, talent pipeline and innovative ecosystem. Each year, more than 100,000 students enroll in the region s colleges and universities. Cluster score: 55.8 Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 36, % 2.9% Establishments 1, % 8.3% Funding Total life sciences % to total U.S. VC funding $577.5M 2.9% NIH funding $979.2M 3.8% Average asking Inventory Total supply % Total vacancy rent (NNN) 12.4M s.f. 19.7% $18.52 p.s.f. Over 27,000 degrees are awarded annually, contributing to Raleigh- Durham s highly educated workforce. With a population of 1.9 million, 45.6 percent of adults aged 25 years or older have a bachelor s degree or higher. Fully 18.6 percent of the population has a graduate degree. Life sciences employment composition 40% 8% Life sciences employment 36,102 5% 5% 21% 21% non-lab using lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories Research & development Medical & diagnostic laboratories Raleigh-Durham s roster of life sciences companies spans the gamut, ranging from global corporations such as BASF Corporation and FUJIFILM Diosynth to homegrown companies like G1 Therapeutics and BioCryst Pharmaceuticals. Life sciences establishment composition 24% 50% 4% 6% Life sciences establishments 1,004 7% 9% Pharma & medicine MFG Electromedical instrument MFG Medical equipment & supplies Testing laboratories R&D Medical & diagnostic laboratories

57 57 RTP/RDU RTP/RDU Investors see value in RTP/RDU life sciences product Karlin Real Estate made a splash in the Raleigh-Durham market when it bought GlaxoSmithKline s space in the Research Triangle Park in 2017, now known as Parmer RTP. Since then, the investment firm has expanded its reach. Karlin purchased DuPont s 262,000-square-foot building for $6,500,000 and 2400 Ellis Road for $8,000,000. The properties have been renamed Parmer 14 and Parmer Ellis, respectively. With all three purchases, the new owner plans to renovate and amenitize with the end goal of creating an innovation hub. The recent acquisitions bring Karlin Real Estate s Raleigh-Durham footprint to 2.4 million square feet. North Carolina based LabCorp signed a lease for 200,000 square feet at Parmer RTP. The expansion brings the former GlaxoSmithKline campus to approximately 75.0 percent occupied nearly one year after the campus sold to Karlin Real Estate. Contract research organization Rho signed a 15-year deal for 160,000 square feet in the RTP/RDU submarket. The new space, which will serve as the company s new headquarters, will be 50.0 percent larger than its current space. Phase two of the project would add an additional 160,000 square feet should Rho need to expand. Landlords in the market are taking advantage of the return on investment that lab product generates. The Steifel building in RTP, which was lab previously, was purchased by Longfellow and upgraded to meet the needs of new users. Alexandria Real Estate Equities, which acquired the former Syngenta campus in RTP, is taking existing office and lab spaces and repurposing them as they develop the Alexandria Center for AgTech. The acquisition is part of Alexandria s long-term plan to create an immense agriculture technology cluster in Raleigh-Durham, similar to the research campuses they have created in other markets. Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy RTP/RDU 7.0M s.f. 2.1M s.f. 73.6% 25.0% -0.4 ppts # of large blocks over 50,000 s.f. 34 Under construction (s.f.) Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) Recent activity LabCorp Parmer RTP 5 Moore Drive RTP/RDU 200,000 s.f. Class B Pfizer Alexandria Innovation Center 7030 Kit Creek Road RTP/RDU Class B 0 s.f ,000 s.f. $19.29 p.s.f % Keystone Tech XV 900 Davis Drive Biogen RBA: 169,025 $92.12/s.f. Parmer Ellis 2400 Ellis Road RTP/RDU 322,384 s.f. Class B Activity key: Leasing Sales Under construction Large blocks of space

58 58 Downtown Durham & West Raleigh Downtown Durham Minimal availabilities persist in Downtown Durham lab market Completion of the Chesterfield in Downtown Durham alleviated the submarket s tight vacancy, albeit temporarily. One year ago, 100 percent of existing lab space in Downtown Durham was occupied. Since delivery, Duke University, Nutanix, BioLabsNC and Validic have moved in, leaving 12,070 square feet available for occupancy. Longfellow Real Estate Partners is continuing construction on two lab/office buildings in the masterplanned Durham Innovation District (Durham ID), totaling 300,000 square feet. Duke Clinical Research Institute has fully leased one building; the other will offer 150,000 square feet of available space. The masterplanned development consists of 15.0 acres in Downtown Durham and has 115,000 square feet of existing lab space. Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy # of large blocks over 50,000 s.f. Downtown Durham 418,185 s.f. 114,600 s.f. 4.3% 2.2% +2.2 ppts West Raleigh 416,339 s.f. 0 s.f. 3.4% 3.3% ppts 2 0 Under construction (s.f.) 300,000 s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) 7 82,000 s.f. $29.50 p.s.f % 7 74,000 s.f. $29.75 p.s.f. +0.8% West Raleigh University partnership leads the way in West Raleigh With demand high for lab space in the West Raleigh submarket, recent development has been done in partnership with NC State University. One of the largest availabilities in this submarket is located in the Biomedical Partnership Center, which currently has 13,809 square feet available for lease. The building delivered in the third quarter of 2017 and is partially occupied by NC State s Veterinary School. The university s Centennial Campus has played a critical role in fostering innovation in the market. The campus partners with government and industry entities to create a collaborative environment that works with NC State s resources and talent pipeline. Recent activity Validic The Chesterfield 701 W. Main St. Downtown Durham 10,000 s.f. Durham Innovation District 300 Morris St. 150,000 s.f. $29.50 NNN Activity key: Leasing Sales Under construction Large blocks of space Triangle Biotechnology Center 323 Foster St. The Seng Company RBA: 18,491 Class B $270.40/s.f. Biomedical Partnership Center 1001 William Moore Drive West Raleigh 13,809 s.f.

59 59 San Diego San Diego is one of the leading life sciences markets in the nation. The industry s employment has grown by 20 percent over the last five years and contributes $33.6 billion to the local economy. The San Diego market continues to see demand for life sciences facilities, with more than 2.7 million square feet added since the beginning of 2016 and 363,000 square feet under construction. North County Torrey Pines acts as the heart of the San Diego life sciences cluster and is home to prominent institutions such as Sanford Burnham Prebys Medical Discovery Institute, The Scripps Research Institute, Salk Institute, Sanford Consortium and the J. Craig Venter Institute, among others. Major lab supply: Clusters of established lab stock with longtime industry presence Emerging lab supply: Areas with limited lab stock today that are poised for growth Sorrento Valley Sorrento Mesa Life sciences Torrey Pines supply: Clusters of space UTC devoted to pharmaceutical, biological or medical device and instrument Torrey Pines Torrey Pines is home to San Diego s largest concentration of lab space. The submarket is adjacent to UC San Diego and the Pacific Ocean. Torrey Pines acts as the epicenter of San Diego s life sciences market and is home to acclaimed research institutes, large pharmaceutical companies and successful biotechs ranging from startups to mature companies. UTC UTC is located on the east side of UC San Diego and is composed of mature, publicly traded companies with advanced product development. The submarket is located in an area that offers numerous amenities to tenants via a large upscale shopping mall and other sizable shopping centers. UTC is also home to one of San Diego s largest office markets. Sorrento Mesa Sorrento Mesa caters to all tiers of life sciences companies and sometimes acts as a value alternative to Torrey Pines or UTC. Sorrento Mesa was formed as developers saw opportunities for greater returns through the conversion of industrial and flex buildings into wet lab facilities. The submarket is also a regional hub for high-tech companies. Sorrento Valley Sorrento Valley developed as an ancillary market to Torrey Pines and today continues to be home to many of San Diego s life sciences companies. With a base of older industrial and flex buildings that have been converted to lab space, this submarket has historically provided a more economical alternative for early- and mid-stage companies. North County North County is situated about 30 minutes north of San Diego s primary life sciences cluster. The North County life sciences submarket is anchored by a handful of large companies and a significant amount of the composition includes. North County has carved out a healthy niche apart from the primary San Diego life sciences cluster.

60 Scorecard Economic 60 San Diego, with its rich pool of R&D talent and new company formations, is known for continually producing companies with advanced technologies that position them for acquisition. Global biotech and pharma companies continue to depend on early-stage biotechs to drive innovation, and San Diego has proven it can do just that. The region has secured over $56 billion in mergers and acquisitions activity since Celgene acquiring Impact Biomedicines in Q for $7 billion is the latest major deal since BD s acquisition of CareFusion in 2015 for $12.2 billion. Another deal is Ignyta, which was acquired by Roche for $1.7 billion in December In addition, San Diego is well positioned to attract renewed attention from the major players in the national and global markets. There is just around 1 million square feet of active tenant demand in the life sciences market. This demand is expected to produce approximately 500,000 square feet of positive net absorption in occupancy growth. Leasing activity was driven by new company formations and local company growth, which caused the total availability rate for the San Diego life sciences cluster (Torrey Pines, UTC/Campus Point, Sorrento Mesa, Sorrento Valley, North County) to end the first quarter of 2018 at 6.1 percent. Cluster score: 68.4 Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 66, % 2.9% Establishments 1, % 4.4% Funding Total life sciences % to total U.S. VC funding $749.5M 3.8% NIH funding $845.9M 3.2% Average asking Inventory Total supply % Total vacancy rent (NNN) 18.0M s.f. 6.1% $46.20 p.s.f. Life sciences employment composition 50% 52% 8% 11% Life sciences employment 66,567 12% 7% 3% 19% 9% 12% 10% 7% non-lab using lab using Life sciences establishment composition Life sciences establishments 1,475 Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories Research & development Medical & diagnostic laboratories Pharma & medicine MFG Electromedical instrument MFG Medical equipment & supplies Testing laboratories R&D Medical & diagnostic laboratories

61 61 Torrey Pines & UTC Torrey Pines Big names continue to flock to Torrey Pines Torrey Pines saw some highly prominent companies sign leases over the past year. Some of the companies include expansions and new leases for Pacira Pharmaceuticals, Synthetic Genomics, Inhibrx, Arcturus Therapeutics and Gossamer Bio. Torrey Pines vacancy rate remains the tightest biotech submarket, edging down 100 basis points over the past year, mostly due to expansions and new leases. Torrey Pines continues to have limited availabilities for companies to choose from. Likewise, rental rates have remained steady, with deals continuing to be signed with starting rental rates in the low $ $54-persquare-foot NNN range. Facilities scorecard Supply Torrey Pines UTC Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy 5.9M s.f. 1.9M s.f. 32.8% 4.0% -1.0 ppts 3.8M s.f. 0.2M s.f % 7.6% -8.1 ppts # of large blocks over 50,000 s.f. 2 2 Under construction (s.f.) 0.2M s.f. 0.16M s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) 6 0.2M s.f. $52.20 p.s.f. +3.6% M s.f. $51.00 p.s.f. +6.3% UTC UTC is the fastest growing life sciences submarket in San Diego During the past two years, the UTC submarket has seen more growth to its inventory base than all of the other San Diego life sciences submarkets combined. Since the second quarter of 2015, the submarket has seen 1.4 million square feet of new inventory brought online. The new inventory included a few build-to-suit sites, but the vast majority of that new inventory consisted of former office buildings that were purchased and converted to life sciences facilities. Takeda Pharmaceuticals is expanding its presence with a 163,649-square-foot build-to-suit with Alexandria Real Estate that will be delivered Q They will be relocating from two HCP, Inc. buildings located in Torrey Pines. Illumina s continued expansion dominated the leasing activity over the past few years. The company moved into a new lease of 316,000 square feet in Q and completed construction on a new 295,000-square-foot facility during the last quarter of Recent activity United Therapeutics Science Center Drive Torrey Pines 8,386 s.f. $51.00 NNN Takeda Pharmaceuticals 9625 Towne Centre Drive UTC 163,649 s.f. $51.24 NNN Activity key: Leasing Sales Under construction Large blocks of space Torrey Ridge Alexandria RE Equities Torrey Pines RBA: 292,000 $625/s.f Campus Point Drive TIAA-CREF (45% interest) UTC RBA: 449,741 $680/s.f.

62 62 Sorrento Mesa & Sorrento Valley Sorrento Mesa Sorrento Mesa continues to remain active Although vacancy rose 230 basis points year-over-year, Sorrento Mesa led all submarkets in Q for leasing, with a total of six completed transactions that produced 98,944 square feet of total gross leasing activity. Alexandria Real Estate acquired a 316,531-square-foot campus located at Summers Ridge Road on a sale leaseback to Quidel, Inc. There are another 315,000 square feet of deals currently under negotiation in Sorrento Mesa, which will continue to strengthen fundamentals in the submarket. Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy Sorrento Mesa Sorrento Valley 4.1M s.f. 1.0M s.f. 23.0% 6.3% +2.3 ppts 1.2M s.f. 0.1M s.f. 6.3% 6.9% -3.6 ppts # of large blocks over 50,000 s.f. 3 0 Under construction (s.f.) 0 s.f. 0 s.f. Demand # of requirements Total s.f. requirements 5 0.3M s.f M s.f. Sorrento Valley Sorrento Valley true to incubator identity with small deal volume Pricing Average asking rent (NNN) $43.80 p.s.f % $42.00 p.s.f % The Sorrento Valley submarket saw a significant decrease in vacancy over the past year by dropping 360 basis points. Despite lackluster activity from San Diego s larger users, demand from small and midsized companies has remained active. Eighty-five percent of the leases completed in Sorrento Valley over the past year were under 10,000 square feet, which exemplifies the incubator nature of the submarket. There are currently multiple deals in the proposal or lease negotiation stages, and we expect the vacancy rate in Sorrento Valley to remain tight, as some of the larger blocks get re-leased. Recent activity NuVasive, Inc Lusk Blvd. Sorrento Mesa 251,941 s.f. $38.04 NNN Quidel Corporation 9975 Summers Ridge Road Sorrento Mesa 192,070 s.f. $38.52 NNN Summers Ridge Road Alexandria Real Estate Sorrento Mesa RBA: 247,168 $601/s.f Pacific Center Court City Office REIT, Inc. Sorrento Mesa RBA: 384,558 Class B $278/s.f. (Life sciences/office/r&d mix) Activity key: Leasing Sales Under construction Large blocks of space

63 63 North County North County One available large block brings San Diego s North County vacancy up North County s vacancy rate of 7.5 percent marks the highest levels seen in well over a decade, following the last peak in vacancy of 20.6 percent in mid Two of the top availabilities in the North County include Dart Neuroscience s 191,677-square-foot building in Scripps Ranch and a 46,969-square-foot space for Abbott Laboratories sublease space located in Carlsbad. There are no specific life sciences projects currently under construction, but the North County area has been among the leaders in delivering new industrial and R&D product in this cycle. With limited space available in North County s life sciences product, a push in demand could woo some of the new creative industrial and R&D landlords to build out lab space. Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy North County 3.0M s.f. 0.8M s.f. 16.7% 7.5% +6.4 ppts # of large blocks over 50,000 s.f. 1 Under construction (s.f.) Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) 0 s.f M s.f. $24.00 p.s.f % Recent activity 2855 Gazelle Court Carlsbad Ionis Pharmaceuticals, Inc. RBA: 176,000 s.f. $451/s.f. Neurocrine Biosciences El Camino Real Del Mar Heights 140,591 s.f. $44.52 NNN LabCorp Evening Creek Drive Rancho Bernardo 109,780 s.f. Class B $23.16 NNN Crown Bio W. Bernardo Drive Rancho Bernardo 32,206 s.f. Class B Activity key: Leasing Sales Under construction Large blocks of space

64 64 San Francisco Bay Area Richmond The San Francisco Bay Area is the birthplace of the biotechnology industry, and it is a leading life sciences market today. The founding of Genentech in South San Francisco in 1976 gave the industry its start, and a unique combination of talent and money has helped the sector grow. Oakland Lafayette Walnut Creek The University of California at San Francisco, Stanford University, the University of California at Berkeley and others are a source of talented graduates and also provide advanced technologies and scientific discoveries, establishing a critical mass of scientific research professionals to help new and existing companies grow. Major lab supply: Clusters of established lab stock with longtime industry presence San Francisco Bayview Alameda Emerging lab supply: Areas with limited lab stock today that are poised for growth Hayward Pleasanton San Bruno San Mateo Redwood City Union City Fremont Life sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device and instrument San Francisco Mid-Peninsula The Mid-Peninsula is the birthplace of genetics engineering, which began with Genentech more than four decades ago. Today the largest players in the life sciences industry, including Roche (Genentech), Gilead, Illumina, Merck, Amgen, Abbott and the life sciences arm of Google (Verily), have a established a foothold in the area, which boasts one of the densest concentration of highly qualified life sciences professionals. Oakland/East Bay Oakland/East Bay is home to anchor research institutions, prestigious universities and major healthcare companies like Novartis and Bayer Healthcare. The Oakland Enterprise Zone was established in 1993 to revitalize the business area by offering tax incentives. The creation of the Enterprise Zone led to the emergence of Berkeley and Emeryville, which today represent two of the largest life sciences markets in the Bay Area. Mission Bay Mission Bay has a smaller life sciences cluster relative to the rest of the Bay Area; however, the region is home to major life sciences tenants such as Medivation, Illumina and Clovis Oncology. San Francisco s prestigious UCSF attracts talent from around the world, further enhancing a well-educated labor pool.

65 Scorecard Economic 65 The local concentration of major research universities, teaching hospitals, scientific research institutions and life sciences industry companies have established a critical mass of scientific research professionals to fuel innovation and growth. Cluster score: 77.3 Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 74, % 9.2% Establishments 1, % 6.2% Funding Total life sciences % to total U.S. VC funding $4,170.1M 21.2% NIH funding $999.1M 3.8% Average asking Inventory Total supply % Total vacancy rent (NNN) 26.0M s.f. 7.9% $47.39 p.s.f. The Bay Area is a good place for businesses seeking venture capital funding. Biotech, pharmaceutical and medical device makers in San Francisco and the Silicon Valley attracted $1.2 billion in venture capital during 2017, representing about 30 percent of the total nationally for these industries. Employment has made strong gains, growing 9.2 percent from last year as the local industry expands. Life sciences employment composition 52% 6% Life sciences employment 74,046 18% 4% 8% 12% non-lab using lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories Research & development Medical & diagnostic laboratories Several of the largest and most successful biotechnology companies are based in the Bay Area, even after some have been acquired by big pharma companies. Roche took full ownership of Genentech in 2009 and maintains operations in South San Francisco. Additionally, Chiron Corporation, founded in 1981, was acquired by Novartis in Even companies like San Diego based Illumina (ILMN) have established significant operations in the Bay Area to tap local talent. Life sciences establishment composition 51% 14% 5% Life sciences establishments 1,708 11% 12% 7% Pharma & medicine MFG Electromedical instrument MFG Medical equipment & supplies Testing laboratories R&D Medical & diagnostic laboratories

66 66 Mid-Peninsula South County Tight conditions creating demand and migration Leasing conditions in the South County are heated. There are few large lab options for expanding tenants, while smaller tenants are aggressively competing for spaces less than 10,000 square feet. Jazz Pharmaceuticals and Grail have both expanded their presence locally, leasing 99,000 and 60,000 square feet respectively. Lab development has been limited given the ongoing demand for high-tech office space and a challenging development environment. More landlords have been open to office-to-lab conversions, which is starting to gain momentum. Facilities scorecard Supply South County North County Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy 3.4M s.f. 0 s.f. 0.0% 1.6% -1.4 ppts 7.2M s.f. 3.1M s.f. 38.5% 2.9% +1.7 ppts # of large blocks over 50,000 s.f. 1 7 Under construction (s.f.) 64,996 s.f. 1.M s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) ,000 s.f. $53.52 p.s.f. +3.5% M s.f. $58.68 p.s.f. -4.3% North County Developers break ground on more speculative development Over the past 24 months, the North County has experienced a surge in life sciences leasing activity. Several large pharmaceutical and biotech companies have aggressively expanded while others have consolidated into brand-new headquarters locations, including AstraZeneca, Illumina, Denali Therapeutics and Verily. Developers remain confident in current market conditions. Nearly 1.0 million square feet of speculative life sciences construction has broken ground over the past six months. The most notable is HCP s Gateway of the Pacific, which will add 512,000 square feet of Class lab product to North County s inventory. Rents have declined when compared to last year; however, much of this is a function of the lack of space on the market. Newer construction is commanding a premium in the market, ranging between $57.00 and $ Recent activity Denali Therapeutics The Cove 161 Oyster 151,000 s.f. Lab Corp/Monogram Bio 345/347 Oyster Point South San Francisco 80,019 s.f. Activity key: Leasing Sales Under construction Large blocks of space Gateway of the Pacific 1000 Gateway Blvd. 512,000 s.f. Jazz Pharmaceuticals 3181 Porter Drive Palo Alto 99,415 s.f.

67 67 East Bay Oakland Metro 93% of lab space is occupied Berkeley and Emeryville continue to be the East Bay s primary life sciences hub, anchored by companies like Zymergen, Inc., and Aduro Biotech. Though large blocks of available lab space are becoming scarce, Wareham Development s EmeryStation West is currently under way and is the only project in Oakland Metro that is spec development, set to deliver summer The project is currently 0.0 percent preleased and is asking about 12.0 percent above market rate. While competition for space is tight, companies are still willing to pay the rent premium to remain within close proximity to talent in the East Bay. Tri-Valley Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy East Bay major lab 5.3M s.f. 1.5M s.f. 28.3% 7.7% -2.1 ppts East Bay emerging lab 6.8M s.f. 1.8M s.f. 26.5% 12.8% +2.6 ppts # of large blocks over 50,000 s.f. 2 5 Under construction (s.f.) 265,000 s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) K s.f. $51.00 p.s.f. 6.3% K s.f. $36.00 p.s.f. 20.0% Tri-Valley exhibits organic demand Lawrence Livermore National Labs still serves as the region s anchor tenant, but other companies have settled into neighboring submarkets like Dublin and Pleasanton, where companies like 10X Genomics are looking to expand. Biotech firms in the Tri-Valley have been consistently pulling in venture capital funding for several years now, allowing companies to expand their operations and increase productivity. options are limited, especially in Dublin and Pleasanton, as companies lock in long-term deals and expand within the market. Companies view the suburban East Bay as an ideal place for the life sciences sector to flourish, for costsensitive startups and biotech giants alike. Recent activity Zymergen, Inc th St. Emeryville 125,150 s.f. Sila Nanotechnologies, Inc Mariner Square Loop Alameda 63,786 s.f. Class B EmeryStation West 5959 Horton St. Emeryville 265,0000 s.f. Foundry San Pablo Ave. Berkeley 90,152 s.f. Activity key: Leasing Sales Under construction Large blocks of space

68 68 San Francisco Mission Bay/China Basin Red-hot office demand cuts into life sciences development San Francisco s life sciences inventory remains concentrated in the Mission Bay/China Basin submarket and is relatively stable. With very limited supply, there is currently 0.0 percent vacancy in the submarket. Life sciences tenant demand remains steady, though with little room to grow companies are forced to look at San Mateo and Alameda County to accommodate their space needs. Illumina, which leases space at 499 Illinois Street, has opened a new campus in Foster City in the Mid- Peninsula and will be relocating its San Francisco employees there. Its Mission Bay campus will be put on the market for sublease, allowing for some movement in an otherwise constrained market. A number of under-construction projects were anticipated to bring some relief, but robust tenant demand and lack of large block space throughout the city has pushed non-life-sciences tenants into Mission Bay. They have voraciously snapped up would-be life sciences developments for office use. A notable example of this trend is Dropbox leasing all of the Exchange, a project that was expected to provide both office and lab space but ultimately delivered only office as a result of office demand. Mission Bay will continue to evolve as developments deliver and receive entitlements; future projects include San Francisco Giants Mission Rock, Orton Development s Phase I Pier 70 and Forrest City s Phase II Pier 70 to the south. All of these have significant commercial and residential components that will lend to developing Mission Bay into a denser, more connected environment. Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy San Francisco 1.1M s.f. 375,079 s.f. 26% 0% -5.0 ppts # of large blocks over 50,000 s.f. 0 Under construction (s.f.) Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) Recent activity Nektar Therapeutics Alexandria s Center for Science and Technology Mission Bay 153,203 s.f. 185 Berry St. China Basin 92,882 s.f. $60 $70 p.s.f. NNN 0 s.f ,000 s.f. $60 $70 p.s.f. 0% Activity key: Leasing Sales Under construction Large blocks of space

69 69 Seattle Puget Sound is home to many large life sciences institutions, but is driven primarily by small to mid-sized companies that are experiencing dynamic growth as a result of significant innovation. The market continually ranks in the top 10 nationally in VC and NIH funding, as well as patents issued, further demonstrating its position as an innovation hub supported by some of the world s largest philanthropic organizations. Bothell Ballard/ University District 5 Redmond Major lab supply: Clusters of established lab stock with long-time industry presence Queen Anne Belltown/Denny Regrade Seattle CBD Pioneer Square Water Front Lake Union Capitol Hill 90 Bellevue CBD Suburban Bellevue Emerging lab supply: Areas with limited lab stock today that are poised for growth South Seattle Mercer Island 405 Life Sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device & instrument Seattle Bellevue 2018 is proving to be a banner year for mergers and acquisitions across the Puget Sound life science market with over $11 billion in transactions as of May up from roughly $735 million for the all of Much of that is due to the purchase of Juno Therapeutics by Celgene Corp which came in with a total acquisition price of $10.4 billion. This followed the recently delivery and lease of the Alexandria Center by Juno Therapeutics. Positive momentum for life sciences in the region was also seen in venture capital funding for a variety of established and startup life science companies. By far the largest round of venture capital funding was Alder BioPharmaceuticals s announcement of $250 million worth of funding for their anti-migraine drug eptinezumab. Based out of the Bothell, Alder BioPharmaceteutical is a prime example of a company establishing itself in the cheaper, outlying suburbs which have significant vacant lab space. However, despite the difference in costs, Lake Union still proves to be the most attractive life science submarket in Seattle. With a concentration of major institutional research centers such as the Allen Institute for Brain Science and Fred Hutch along with the presence of major philanthropic organizations and educational institutions, such as the Bill & Melinda Gates Foundation and the University of Washington, all combine to form a high life sciences concentration in Lake Union.

70 Scorecard Economic 70 The Seattle- Bellevue life science market continues to see positive growth, in large part thanks to the concentration of talent in Lake Union. Fred Hutch continues to act as an incubator for new life science firms in the region, with Nohla Therapuetics an example of a Fred Hutch spinout receiving significant funding ($45 million) for clinical trials. Another Fred Hutch success story is the awarding of an $8 million no strings attached grant to Fred Hutch researcher Jesse Bloom to study the evolution of the flu-virus. Despite a failed trial that caused it to cancel its flagship cancer drug, Juno Therapeutics was purchased in full by its partner, Celgene, for $10.4 billion. Bothell-based Alder BioPharmaceteutical raised $250 million to continue production of their antimigraine drug while Nanostring Technologies recently announced a partnership with the National Cancer Institute to improve their immunotherapy drugs. Research and development companies make up the largest portion of life sciences institutions in the area. Seattle is on the cutting edge of the fast-growing immune-oncology segment of the life sciences industry. According to a recent report by Research and Markets, this segment is expected to grow from $14.0 billion in 2019 to $34.0 billion by Adaptive Biotechnologies, which is headquartered in the Eastlake neighborhood of Lake Union, has a chance to be a major player in the space. Cluster score: 40.1 Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 36, % 2.9% Establishments 1, % 8.3% Funding Total life sciences % To total U.S. VC funding $577.5M 2.9% NIH funding $979.2M 3.8% Average asking Inventory Total supply % Total vacancy rent (NNN) 10.0M s.f. 4.9% $35.35 p.s.f. Life sciences employment composition 40% 24% 8% Life sciences employment 36,102 5% 50% 5% 4% 6% 21% 21% 7% 9% non-lab using lab using Life sciences establishment composition Life sciences establishments 1,004 Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories Research & development Medical & diagnostic laboratories Pharma & Medicine MFG Electromedical Instrument MFG Medical Equipment & Supplies Testing Laboratories R&D Medical & Diagnostic Laboratories

71 71 Seattle Lake Union Lake Union continues to be a hotbed for Life Science incubators Lake Union is the hotbed of the Seattle life science market, sporting a wide variety of incubator style life science labs along with a significant institutional research centers such as Fred Hutch and the University of Washington. Alexandria Real Estate's The Atrium is currently under construction and is scheduled to deliver 205,000 square feet of space to the market by early None of the space has been pre-leased, but it is believed that multiple potential tenants are touring and considering to take the space. Fred Hutch Cancer Research Center accounts for 1.6 million square feet of institutionally owned lab space in Lake Union. Fred Hutch also acts as an incubator for several start up companies in the Lake Union submarket. Capitol Hill Capitol Hill remains a tight market due to a lack of available space options. Capitol Hill is the home to Harborview Medical Center, Swedish Medical Center, as well as Benaroya Research Institute and CellNetix. The submarket currently has no vacant lab space and no new projects planned for the foreseeable future. Market is tight in terms of vacancy and costs are getting higher. As such, finding quality space for life science firms is becoming hard across the submarket. Facilities scorecard Supply Lake Union Capitol Hill Rentable lab stock Owner occupied lab stock (% of total lab stock) Total vacancy 2.0M s.f. 1.7M s.f. 37.7% 1.4% - 0.6M s.f. 0.3M s.f. 8.7% # of large blocks over 50,000 s.f % - Under construction (s.f.) 0.2M s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) Recent activity Impel NeuroPharma 201 Elliott Lake Union 11,256 s.f. $50.00 NNN NanoString Technologies 500 Fairview Lake Union 19,001 s.f. $54.00 NNN Activity key: ,000 s.f. $ % Leasing Sales Under construction Large blocks of space 0 0 s.f. The Atrium 1818 Fairview Lake Union 204,941 s.f. Under Construction Silverback Therapeutics 500 Fairview Lake Union 19,829 s.f. $54.25 NNN -

72 72 Life Sciences Outlook United States 2017 Suburbs Bothell Several options for growth exist in the suburbs Bothell is the second largest life sciences market in the Seattle area with 2.1 million square feet of inventory spread between its two core areas of Canyon Park and North Creek. The location in the suburbs offers quality, low-cost alternatives to the more expensive Lake Union and Capitol Hill submarkets in Seattle. Vacancy in Bothell declined 40 basis points year-overyear to the current rate of 13.2 percent. Although there are only two blocks of available space larger than 50,000 square feet, Bothell remains the one submarket in the region with plentiful available lab space. After a $511 million merger last year between Tokyobased AGC Asahi Glass and CMC Biologics, AGC Biologics announced its addition of new building complex in Bothell. The expansion facility will provide additional space for capacity. Seattle Genetics, a biotech company headquartered in Bothell focused on antibody-based cancer therapies, completed its acquisition of Seattle-based Cascadian Therapeutics for $614 million in early Redmond Vacancy plummets and rental rates rise Vacancy in Redmond increased 220 basis points in the last 12 months and currently stands at 8.4 percent. Rental rates increased 8.1 percent year-over-year, but at $18.19 per square foot NNN, Redmond is still the cheapest option for lab space in the region. Cardiac Dimensions, a medical device manufacturer, received an additional $39 million in venture capital funding. The company develops tools and techniques to assist with heart failure and related conditions. Facilities scorecard Supply Bothell Redmond Rentable lab stock Owner occupied lab stock (% of total lab stock) Total vacancy 1.6M s.f. 0.5M s.f. 22.5% 13.2% -4.0 ppts 0.5M s.f. 0 s.f. 5.4% 4.7% -7.6 ppts # of large blocks over 50,000 s.f. 2 0 Under construction (s.f.) 0 s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) Recent activity CMC Biologics th Ave SE Bothell 50,297 s.f. Class B $22.20 NNN Nexus Research Center rd Dr SE Bothell 78,178 s.f. Class B $26.00 NNN Activity key: 5 255,000 s.f. $ % Leasing Sales Under construction Large blocks of space 0 - $ % Zymogentics 3450 Monte Villa Pkwy Bothell 51,000 s.f. Class B $26.27 NNN Seattle Genetics th Dr. SE Bothell 63,900 s.f. Class B $25.00 NNN

73 73 Greater Toronto The Greater Toronto area is home to Canada s largest combined life sciences sector. It is the Canadian home for 6 of the top 10 global pharmaceutical companies. It is also home to Canada s most concentrated life sciences research node, the Discovery District, which has seen significant expansion over the past decade. Toronto is home to the two largest research hospitals in the country. The Greater Toronto area also offers significant labor cost savings over established life sciences clusters in American cities. Brampton Major lab supply: Clusters of established lab stock with longtime industry presence Emerging lab supply: Areas with limited lab stock today that are poised for growth Mississauga Toronto 403 Life sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device and instrument Downtown Toronto Discovery District Toronto s Discovery District is a concentrated life sciences cluster on the northern edge of downtown Toronto. Located within the node is the University of Toronto, which is ranked fourth in North America for medical research spending. Additionally, four top Canadian research hospitals Toronto General, St Michael's, Mount Sinai and Hospital for Sick Children are located in the node. Over the last decade the MaRs facilities have been erected, adding 1.4 million square feet of office and lab space primarily dedicated to the life sciences. Mississauga Mississauga has developed a substantial reputation for its life sciences cluster. It has a large concentration of major pharmaceutical companies. However, the city is committed to expand beyond its traditional strengths with the goal of creating an innovation district to foster startups. Markham Located just north of the city of Toronto, Markham is a bustling technology hub currently looking to leverage its strengths in high technology and software development to grow its life sciences sector. Notable companies include Johnson & Johnson, Huawei and Abbott Laboratories.

74 Scorecard Economic 74 Over the past year, total life sciences employment has been stable, but a number of establishments have seen notable growth as startups have taken advantage of significant incubator space in the Discovery District. Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 36, % -1.0% Establishments 2, % +12.1% Funding Total life sciences % to total Canada VC funding Can$135.69M 12.6% Average asking Inventory Total supply % Total vacancy rent (NNN) 3.38M s.f. 0.3% $19.28 p.s.f The pharmaceutical subsector anchors the overall life sciences ecosystem, consisting of a number of large multinational enterprises that focus on sales, marketing, clinical trials, operations support and in the GTA. The research, testing and medical laboratory segments are smaller but are growing sectors within life sciences and poised for future growth. Life sciences employment composition 20% 20% Life sciences employment 36,200 20% 29% 11% non-lab using lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Research & development Medical & diagnostic laboratories Pharma and medicine represent 29.0 percent of life sciences employment but only 10.0 percent of companies, which speaks to the large size of companies in the pharmaceutical subsector. Research and development and medical equipment and supplies, on the other hand, have a large proportion of small startups who would most benefit from venture capital funding. Life sciences establishment composition 27% 10% 19% Pharma & medicine MFG Life sciences establishments 2,430 29% 15% Electromedical instrument MFG Medical equipment & supplies R&D Medical & diagnostic laboratories

75 75 Downtown/Mississauga Downtown Toronto Low office vacancy putting pressure on lab space Toronto's Discovery District, located within the Downtown North submarket, has continued to see a tight rental market over the past year, with Q vacancy reaching 2.5 percent. The high demand for office space in the submarket has led non-life-sciences users looking for R&D space, such as Facebook and Autodesk, to lease space in the Discovery District, which has led to a zero vacancy rate. MaRS, however, is currently looking to expand beyond its current footprint to create additional incubator space in the area. Mississauga Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy Downtown Toronto 1.4M s.f. 1.4M s.f. 50.0% 0.0% 0.0 ppts Mississauga 530,000 s.f. 50,000 s.f. 90.6% 1.0% -3.0 ppts # of large blocks over 50,000 s.f. 0 0 Under construction (s.f.) 0 s.f. 0 s.f. Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) 1 55,000 s.f. $29.73 p.s.f. +3.3% 0 0 s.f. $16.21 p.s.f. +2.0% Mississauga in need of increased lab presence Most lab space dedicated to life sciences continues to be purpose-built within corporate campuses of life sciences companies. One recent example of this is DiTEBA, who will be building out lab space in a portion of their new 26,000- square-foot facility out of a standard flex building. With very limited lab vacancy and no new lab construction currently under way, new proposed lab space, like the proposed innovation district, will be key to expanding lab presence of the life sciences industry in Mississauga. Mississauga has developed a substantial reputation for its life sciences cluster, which focuses on sales, marketing, clinical trails, operations support and for companies BD and EMD Serono, who recently renewed their leases this year. Recent activity BD 2100 Derry Road Meadowvale 73,000 s.f. EMD Serono 2695 North Sheridan Road Sheridan 29,000 s.f. DiTEBA 1680 Tech Ave. Eglinton & Dixie 26,272 s.f. Class B Dynacare 2550 Victoria Park Consumers Road 23,400 s.f. Activity key: Leasing Sales Under construction Large blocks of space

76 76 Westchester County Just a short distance from Manhattan, Westchester County is an ideal location for life sciences firms looking to attract and retain talent. The access to transportation is plentiful, with highways, BeeLine buses and Metro North running through the county. Life sciences was one of the only growth sectors in the county during the recession and its subsequent recovery. Regeneron drives the majority of this activity with a massive expansion at 777 Old Saw Mill River Road and new locations in the county. Major lab supply: Clusters of established lab stock with longtime industry presence Emerging lab supply: Areas with limited lab stock today that are poised for growth Life sciences supply: Clusters of space devoted to pharmaceutical, biological or medical device and instrument Westchester County With its proximity to major research institutions and to New York City, Westchester County has been a home to the life sciences sector for nearly 14 years, employing approximately 8,000 biomedical professionals. Nearly 20 percent of all New York biomedical employees are located in Westchester County. For the past decade, companies such as Regeneron and Acorda have headlined life sciences activity in the county. Regeneron is currently expanding at its Old Saw Mill River Road complex by another 300,000 square feet. There is also potential for 500,000 square feet of future redevelopment and development that could accommodate multiple tenants at Ardsley Park, where Acorda s headquarters is located. With no lab blocks currently on the market, this will be a highly sought-after space. The largest project that is coming soon to Westchester is the Bioscience and Technology center that is being planned in an area of Valhalla called the North 60. It is an 80-acre lot and the county owns 75.0 percent of the lot. The planned project will encompass 60 acres of biotech and medical space. This will include New York Medical College s $12.6 million biotechnology incubator and Fareri Associates $1.2 billion, 2.2 million-square-foot biotech and medical park. The project took a big step forward in mid-2017 when the Westchester County Board of Legislators voted unanimously to approve a 99-year lease of the 60-acre lot.

77 Scorecard Economic 77 Westchester has seen year-over-year biomedical employment grow over 5.5 percent. Although there are only two large campuses throughout Westchester, Regeneron and Acorda continue to rapidly grow and are in constant need of new employment. On top of that, new construction on the horizon could double life sciences employment in the county. Cluster score: 37.7 Workforce Total life sciences % Life sciences to private employment Year-over-year growth Employment 8, % 5.5% Establishments % -4.7% Funding Total life sciences % to total U.S. VC funding $3.1M 0.02% NIH funding $4.9M 0.02% Average asking Inventory Total supply % Total vacancy rent (NNN) 2.2M s.f. 0% $52.00 p.s.f. Dominating Westchester s life sciences industry is Regeneron, the biomedical powerhouse that has kept its lab and headquarters in the county since The company s success and industrylauded work environment have helped draw other firms like Acorda to the county. Regeneron s revenue for 2017 rose 21.0 percent from the previous year to $5.87 billion. Life sciences employment composition 50% 11% 5% 5% Life sciences employment 8,187 29% non-lab using lab using Pharma & medicine Electromedical instrument Medical equipment & supplies Testing laboratories Research & development Medical & diagnostic laboratories Westchester County is currently experiencing extremely low vacancy rates for lab and research space. In fact, there is currently no lab space available in Westchester County. The NY Blood Bank is currently on hold trying to find space. The North 60 project that is being planned will add significantly more inventory to the market. Life sciences establishment composition 31% 28% 2% 9% Life sciences establishments % 13% Pharma & medicine MFG Electromedical instrument MFG Medical equipment & supplies Testing laboratories R&D Medical & diagnostic laboratories

78 78 Westchester County I-287 West Corridor Regeneron shows presence to the world and competition Regeneron recently announced the shipment of an Ebola treatment to the Democratic Republic of Congo. Working with the World Health Organization and the FDA, Regeneron will provide the treatment as a Monitored Emergency Use of Unregistered Interventions to help control the recent outbreak. Regeneron is not too far behind competitors Merck and Bristol-Myers Squibb with an experimental lung cancer treatment. Patients have shown encouraging results in earlystage studies. Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy # of large blocks over 50,000 s.f. Under construction (s.f.) Demand # of requirements Total s.f. requirements Pricing Average asking rent (NNN) I-287 West Corridor 0.2M s.f. 2.0M s.f. 100% 0% 0 ppts 0 0.3M s.f M s.f. $52.00 p.s.f. 0.0% Westchester County Bioscience and Technology Center expected to create thousands of jobs The initiative to strengthen Westchester County continues with a $1.2 billion private investment by Fareri Associates to create a 3.0 million-square-foot complex on a vacant site near the Westchester Medical Center in Valhalla known as the North million square feet of biotech/research space will be added upon completion and will add roughly 8,000 biomedical jobs as well as 4,000 construction jobs. The project is currently going through environmental site planning and approval, a process that can take up to two years. A 34,000-square-foot children s living science center as well as a 100-room hotel are included in the project. Recent activity 777 Old Saw Mill River Road Regeneron West I-287 Corridor RBA: 1,180,480 s.f. $610/s.f. 1 Rockwood Road Regeneron Westchester North RBA: 383,000 s.f. $130/s.f. Activity key: Leasing Sales Under construction Large blocks of space

79 Who s who? Want to know more? Lisa Strope Director, Life Sciences and Healthcare Research Americas Research +1 (617) Lisa.Strope@am.jll.com David Coffman Analyst, Research Americas Research +1 (617) David.Coffman@am.jll.com Need Life Sciences industry expertise? Roger Humphrey Executive Managing Director Life Sciences Roger.Humphrey@am.jll.com Richard McBlaine International Director Corporate Client Development Richard.Mcblaine@am.jll.com Dan Loughlin Vice Chairman, Life Sciences Brokerage Brokerage, New Jersey Dan.Loughlin@am.jll.com