By: Jerry Fennelly, SIOR, President, Fennelly

With over 20 pharmaceutical and medical technology companies and over 300 biotechnology companies calling New Jersey home, it is no secret why the state has earned its name as the “Medicine Chest of the World.” Long the home of a diverse range of life sciences companies including industry titans such as Johnson & Johnson and Merck as well as hundreds of exciting startups, New Jersey has been the location of many of the most significant discoveries and innovations across the biotechnology, pharmaceutical and healthcare fields. Today, the state’s highly favorable location and strong talent pool continue to inspire the next generation of innovative and groundbreaking companies and leaders who are focused on creating a healthier and happier world.

Beyond its numerous global scientific contributions, the life sciences sector is also an invaluable economic contributor to New Jersey with an estimated annual contribution of $47.5 billion to the economy and employment for 430,000 people. In addition, students at the state’s 31 top-ranked public and private four-year universities enjoy unmatched access to internships and jobs with many of the world’s top biotechnology, pharmaceutical and healthcare companies.

New Jersey’s robust life sciences sector has created the ideal underlying foundation for what has become one of the nation’s most competitive life sciences real estate markets. In the year ahead, overall commercial real estate fundamentals and macroeconomic forces have the asset class poised for continued strength.

A Challenging Market

New Jersey’s nation-leading population density, high per-capita income, deep talent pool of master’s degrees and PhDs and proximity to two of the country’s largest cities continue to make it one of the most attractive commercial real estate markets in the United States. While the state’s underlying fundamentals are strong, the same conditions that create such a favorable investment market also make it one of the most crowded and competitive markets in the nation.

According to data from New Jersey Future, as of 2015, 86.3 percent of the state’s land was either already developed or environmentally protected leaving just 13.7 percent of the state’s land suitable for development. Fast forward to today and with rapid development across the state over the last seven years, that number has surely decreased. With the decrease in New Jersey’s available land and the state’s rigorous, time-consuming entitlements process, development of new space grows more difficult by the day. In addition, rising land costs are being paired with rising construction costs to make ground-up development for any asset class difficult.

For life sciences companies who have highly specific needs and requirements for space, today’s supply-constrained market can often make the real estate process seem like finding a very expensive needle in a haystack. As the life sciences sector only grows in the years to come, the search for suitable space will only grow more competitive and expensive by the day.


Clearly, the pharmaceutical and biotechnology industries will continue to see robust growth in the Garden State.  And that growth will require appropriate and specialized facilities for research, development, manufacturing and testing. In addition to traditional laboratory space, these necessary facilities can include manufacturing clean rooms, biocontainment and biohazard provisions, pilot plants – you name it.  But with the dearth of developable land, the industry must look for other solutions to meet this growing need.

One solution is adaptive reuse.  It’s no secret that the commercial real estate market had changed dramatically as a result of the COVID-19 pandemic.  Many large suburban office buildings that once teemed with nine-to-five workers are now barely used, as the white-collar workforce has transitioned to remote or hybrid working environments.  Consequently, owners of these buildings are feeling the squeeze as tenants re-negotiate leases and downsize their space due to work from Home.

Many owners are now investigating converting these buildings for other uses – I’ve recently seen office buildings converted to apartments and self-storage facilities and potential does exist for conversion to life sciences usages.

Beyond the conversion of office space, I am seeing examples of newly installed technology that might otherwise be overlooked.  One example is a building we are currently marketing for sale.

31 Shalks Crossing Road in Plainsboro, N.J. is a 50,150-square-foot, 31-acre state-of-the-art research drug manufacturing facility that was originally constructed in the 1950s as the nation’s first privately-owned nuclear reactor that was utilized as a research reactor by a variety of public and private research institutions including nearby Princeton University.  The reactor was decommissioned in the late 1970s.

Despite being rendered obsolete in its original role, the facility’s prior scientific usage enabled it to find a second life as a drug research and manufacturing facility. After undergoing extensive remediation and renovation to bring it up to pharmaceutical research and manufacturing standards, the property served as the home to a leading manufacturer of generic pharmaceuticals for over 30 years. The property was renovated between 2016 to 2021 to ensure it could continue to meet the compliance needs of modern drug manufacturing. Today, the building is ideally suited to modern advanced pharmaceutical ingredients (API) and tablet production with nine 15 x15 ISO8 clean rooms with advanced HEPA and Therma filters and nine chemical and fume hoods. These types of existing renovated reuses will be crucial in bridging what has become a significant gap between supply and demand of laboratory and modern API and drug manufacturing facilities.

Looking to the Future

New discoveries are being made every day by companies specializing in targeted therapies, genetics, microbiology, immunotherapy, and biochemistry, to name only a few of the growing sub-specialties.  Unquestionably, the corresponding need for additional biotechnology, research and pharmaceutical space will continue to see the market throughout New Jersey – and in particular, in New Jersey’s “Research Corridor” in central New Jersey remain highly competitive.

This popularity is highlighted by recent entrances and expansion in the marketplace. In just the last year, we have seen NJ Bio taking the entire 78,000-square-foot former Bristol Myers Squib research facility in Princeton where Opdivo was discovered; Gennao Bio, a China-based pharmaceutical company purchasing 45 acres and a 60,000-square-foot drug manufacturing building in Hopewell; PTC Therapeutics leasing 150,000 square feet combined in Hopewell and Princeton and Kyowa Kirin, a Japanese-based pharmaceutical company, expanding to 79,000 square feet at Carnegie Center in Princeton.

But smart, forward-thinking companies and investors can still find opportunities for growth, prosperity and profit in “Medicine Chest of the World.” By working with an experienced commercial real estate team, life sciences companies of all sizes can successfully navigate one of the nation’s most competitive markets and find spaces ideally suited to their needs.

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