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Wherever Biotech Booms Go, Hughes Marino Will Follow

Hughes Marino biotech globe

Hughes Marino is a tenant representation firm that has long been a vital companion to the life science industry explosion that has ignited cities such as San Diego, San Francisco, Boston, Seattle, and Raleigh-Durham, North Carolina. For its part, Hughes Marino has smartly embedded itself with offices in each of those locations.

That’s a solid move. While other industry leaders are slashing their workforce, the biotech industry is booming. It surged during the height of the COVID-19 pandemic and is growing faster than companies can find space to occupy.

Why?


“You’ve had tens of billions of dollars, during [the height of COVID], raised by medical device and biotech companies, much of which has gone into COVID but much which hasn’t,” explains Marino of the sector’s explosive growth. “There are still people dying every day from cancer and Alzheimer’s. So the reality is billions of dollars are going into various pharmaceutical and medical technologies to save lives outside of COVID. And so all of that has driven literally millions and millions of square feet of demand in south San Francisco, and Boston, and San Diego. To a lesser degree, North Carolina and some of the other key life science markets.”

Hughes Marino Co-Founder David Marino: ‘We Don’t Need 20 Biotech Clusters’

Marino predicts the growth of life science will remain contained to a handful of cities. It’s an industry that often clusters together around existing life science sectors, research institutes, and established educational facilities where leasable lab space is plentiful, as is a skilled workforce. 

“We don’t need 20 biotech clusters around the country. In fact, I would advocate it’s not in the interest of science to have a fragmented industry,” Marino says. “Life science companies recruit a very specific type of person and share more information between companies that you see in any other industries.”

To that end, a 2022 report by another real estate services and investment firm states that between 2001 and 2021, life science careers grew by 79%. There are twice as many students graduating with biology and biomedical degrees than there were 15 years ago.

Still, recent studies that look at the growth of the industry seemingly point to the hot spots growing until they can’t anymore — as tinier markets are already emerging. 


The Emergence of New Life Science Markets


Hughes Marino recently set up shop in Boston and in the research triangle of the Raleigh-Durham area, brand-new life science markets bustling with activity.

“We’ve been looking in those markets for a long time for the right people,” he said of recruiting Hughes Marino’s expanding team. “For us, it is all about the right people.”

An article on labiotech.eu states that life science circuits are also emerging in the Denver/Boulder area; Dallas/Fort Worth; Minneapolis/St.Paul; and Nashville, Tennessee. 

Nashville seems primed for rapid growth. It is not only connected with Vanderbilt University Medical Center and National Institutes of Health, but more than 35,000 life science jobs sprouted in the city between 2015 and 2020.

Still, those emerging markets have a long way to go to catch up to the five established markets. 

Marino says the reason why the life science sector is clustered around the big five is simple: Building life science lab space doesn’t come cheap. He says lab space can cost $250 to $350 a square foot, while traditional office space typically runs $80 to $120 per square foot.

Plus, companies want assurance that their investment will be poised for success. 

“When a landlord makes that kind of investment, they want to know that when that tenant moves out or if that tenant gets acquired and goes out of business, they want to know what’s going to happen next, when that space comes back, and that there’s going to be a demand for it,” he said. “They don’t want to tear it out and say, ‘Well, let’s turn it back into office space.’ They’ve got to repurpose those improvements for the next guy. And so that means that landlords are only going to make those investments where there is established, strong demand. So it’s become a little bit of a self-fulfilling prophecy that strong lab markets become even more dominant over time.”

The Future for Hughes Marino Looks Bright in Biotech Focal Points

Back in San Diego, where Hughes Marino is headquartered, Marino says the demand for lab space is intense — and in the past three years, leases have been inked for roughly 5 million square feet of life science space.

“These biotech lab developers can’t build it fast enough. So literally, they’re tearing down one- and two-story office buildings to build six-story lab buildings.”

And Marino can’t help but reminisce on a time when competitors wondered if Hughes Marino could keep up with it all.

“If I go back 10 years ago when [Hughes Marino] opened [in] Orange County and we were only a San Diego company, it was a little bit of a struggle,” he said. “A lot of people that would’ve been really good to work here pooh-poohed the idea that we had any legitimacy or that we could actually pull it off. I am sure people wondered how a few brokers from a secondary market like San Diego, with no outside capital, would ever have a shot at success. You have to have tremendous self-confidence, a tolerance for risk, be willing to work very hard and be very brave to join a startup company.

“As we have grown, we think that’s a really important part of the economy and an important part of our practice,” Marino says. “It’s a very specialized base of knowledge as well, as to what those companies and what that industry requires. And so it’s been a big focus of ours as we’ve expanded into, initially, San Francisco and then Seattle. We’re hiring some of the top office and industry professionals as well. They know what manufacturing and supply chain companies require and what corporate headquarters and traditional office tenants require.”