By Philip Wurth, Executive Vice President, Colliers in Arizona
Greater Phoenix has been laying a solid foundation to become a hub for the bio tech and life science industries since TGen planted its flag here 20 years ago. During the past two decades, the market has attracted cutting-edge educational institutions and created infrastructure to support what will soon become a major expansion of bio tech and life science companies in Arizona.
The creation of a bio tech/life sciences hub in the Valley has been a grassroots effort that is now prepared to blossom. While in its infancy, the proper elements are now in place to support what we anticipate to be a noteworthy surge in companies relocating and growing here in the next 12-36 months.
Since 2000, TGen’s work in our metropolitan area has led to the creation of 25 different bio tech companies. These start-up companies begin small, but grow rapidly. Sadly, since our city lacked proper facilities for these companies’ research, only three stayed in Greater Phoenix. That trend is about to change.
During the past decade, Downtown Phoenix has monumentally expanded its scientific and medical research community. Following TGen’s commitment to the area, ASU expanded its downtown campus, UofA Medical School’s expanded in Phoenix and we attracted Creighton medical school. These institutions demonstrate the city’s dedication to training and providing quality labor to these scientific industries.
In recent years, developers have understood the opportunity to attract bio tech companies if they build proper facilities. As a result, we now have Wexford’s 850 PBC building near Roosevelt Row offering 227,000 square feet of space on the Phoenix Biomedical Campus. The seven-story building is an innovative partnership between Wexford, ASU and the City of Phoenix. The developer is building a variety of speculative, incubator spaces for start-up companies and they are 50 percent leased before construction is finished. This property, in addition to the Illum building in Scottsdale and the Idea Building in Tempe, offers bio tech and life science companies the R&D space that our market previously lacked.
This is not a simple “build it and they will come” philosophy. To best illustrate the vision of Phoenix’ future in this field, we just need to look west to San Diego. Our market is approximately 10 years behind our neighbor in California. A decade ago they had just attracted UC Davis and UC Irvine to the San Diego area and laid their foundation for bio tech growth. Today, that area boasts more than $9 billion in venture capital funding for life science companies. As with many other industries from California, bio tech and life science firms have encountered challenges in that marketplace. Bio tech companies find it difficult to secure adequate space for their endeavors. Supply of quality facilities is limited and the rents are approximately 30 percent more than comparable space here. Not to mention, housing and labor costs are much higher in California.
Phoenix is now poised with an infrastructure that develops quality talent in scientific fields, as well as the real estate to support bio tech endeavors. During the next three years we will benefit from growth in the life sciences industry as TGen and other firms spawn start-ups that incubate here, as well as from California companies opting to move/expand here. This addition to our existing dynamic economy will further diversify our city and provide an abundance of high quality jobs to our residents.