Life Sciences Outlook

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Lisa Powers
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1 Greater Toronto 2018 JLL Research Report Life Sciences Outlook Breakthrough discoveries at a breathtaking pace

2 2 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 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. 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.

3 Scorecard Economic 3 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 Life sciences employment 36,200 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

4 Downtown/ 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

4 4 Downtown/ 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. Facilities scorecard Supply Rentable lab stock Owner-occupied lab stock (% of total lab stock) Total vacancy (Change year-over-year) Downtown Toronto 1.4M s.f. 1.4M s.f. 50.0% 0.0% 0.0 ppts 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) (Change year-over-year) 1 55,000 s.f. $29.73 p.s.f. +3.3% 0 0 s.f. $16.21 p.s.f. +2.0% 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. 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

Want to know more? Lisa Strope Director, Life Sciences and Healthcare Research Americas Research +1 (617) 316-6407 Lisa.Strope@am.jll.

Roger Humphrey Executive Managing Director Life Sciences +1 908 698 1379 Roger.Humphrey@am.jll.

com Dan Loughlin Vice Chairman, Life Sciences Brokerage Brokerage, New Jersey +1 973 939 3869 Dan.Loughlin@am.jll.

A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2016, JLL had revenue of $6.

4 billion square feet, or 409 million square meters, and completed sales acquisitions and finance transactions of approximately $145 billion.

80,000. As of June 30, 2017, LaSalle Investment Management had $57.6 billion of real estate under asset management.

About JLL Research JLL s research team delivers intelligence, analysis and insight through market-leading reports and services that illuminate

Our more than 400 global research professionals track and analyze economic and property trends and forecast future conditions in over 60

5 Want to know more? Lisa Strope Director, Life Sciences and Healthcare Research Americas Research +1 (617) David Coffman Analyst, Research Americas Research +1 (617) Need Life Sciences industry expertise? Roger Humphrey Executive Managing Director Life Sciences Richard McBlaine International Director Corporate Client Development Dan Loughlin Vice Chairman, Life Sciences Brokerage Brokerage, New Jersey About JLL JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2016, JLL had revenue of $6.8 billion and fee revenue of $5.8 billion and, on behalf of clients, managed 4.4 billion square feet, or 409 million square meters, and completed sales acquisitions and finance transactions of approximately $145 billion. At the end of the second quarter of 2017, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of nearly 80,000. As of June 30, 2017, LaSalle Investment Management had $57.6 billion of real estate under asset management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit ir.jll.com. About JLL Research JLL s research team delivers intelligence, analysis and insight through market-leading reports and services that illuminate today s commercial real estate dynamics and identify tomorrow s challenges and opportunities. Our more than 400 global research professionals track and analyze economic and property trends and forecast future conditions in over 60 countries, producing unrivalled local and global perspectives. Our research and expertise, fueled by real-time information and innovative thinking around the world, creates a competitive advantage for our clients and drives successful strategies and optimal real estate decisions Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

Life Sciences. An evolving industry: Today s clusters creating tomorrow s breakthroughs. Denver JLL Research

Life Sciences. An evolving industry: Today s clusters creating tomorrow s breakthroughs. Denver JLL Research Life Sciences Denver 017 An evolving industry: Today s clusters creating tomorrow s breakthroughs JLL Research Denver With college graduates at 41.3 percent and high school graduates at 90.5 percent, Colorado