Washington metro area continues to see growth in life sciences

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While Maryland’s economy in terms of gross domestic product and job growth stagnated in recent years, the life sciences industry has maintained momentum, positioning itself as a driving force in the state economy, particularly in the state’s Washington, D.C., suburbs.

While the industry has taken time to grow in the state, which experts attribute to the long lead time for new products in the sector to reach the market, life sciences have continued to show promise as a key industry for Maryland’s economy.

“So, as long as I’ve been in Maryland — I’ve been in Maryland since 1997 — biosciences have been … the next big thing. They continue to grow. One of the challenges with bioscience … is a long lead time because it requires (federal regulatory) approval, all those things,” Daraius Irani, an economist and vice president of strategic partnerships and applied research at Towson University, said.

Proximity to federal agencies has primarily driven growth, and the sector has established itself as a significant factor in Maryland’s employment and commercial real estate.

According to the state, Maryland is home to 2,700 life sciences companies, with 54,000 employees in the BioHealth Capital Region alone, with the industry making its biggest impact in the Interstate 270 corridor.

In recent years, life sciences job openings have surged in the state at a time when job growth in other parts of the local private sector remained sluggish. Life sciences companies posted nearly 21,000 job openings in 2022, representing a 39% increase from 2019. By comparison, the number of job openings in the industry nationally grew by 8%.

Additionally, commercial real estate brokerage firm CBRE, via a report from the first quarter of 2024, found new energy in portions of the sector that had previously lagged.

“The most notable change in demand was the re-emergence of mid-sized companies—a dormant segment of the user community in 2023,” according to CBRE’s research.

According to CBRE, five new deals for leasing life sciences spaces between 15,000 and 50,000 square feet in size in the first quarter of 2024 underpinned that growth. That total surpassed the number of similar-size transactions for last year and matched the total for 2022.

Overall, CBRE found 17 million square feet of life sciences space in Maryland, with a vacancy rate of 6.1%, and 1.1 million square feet of new space under construction at the start of 2024.

That space is relatively evenly divided between the I-270 and Baltimore metro markets, with 3.3 million square feet and 3.4 million square feet of existing space, respectively.

However, Maryland’s suburbs around Washington D.C., particularly Montgomery County, are home to most of the state’s biomanufacturing and research and development space.

Montgomery County is home to more than 9.2 million square feet of research and development space, according to CBRE’s researchers, compared to nearly 2.7 million square feet in the Baltimore metro area and 214,115 square feet in other areas of the state.

Montgomery County’s 985,051 square feet of biomanufacturing space tops 721,270 square feet of existing space in Baltimore and trails only Frederick County’s roughly 1.9 million square feet of space.

Additionally, the state and organizations dedicated to boosting Maryland’s life sciences industry continue investing in infrastructure to train the workforce the industry needs.

That includes an 8,200-square-foot biopharmaceutical workforce training center in Rockville called BioHub Maryland Training and Education Center at Montgomery County that opened in October. The center focuses on training residents — even those without a degree — for jobs in the biomanufacturing sector of the life sciences industry.

According to the Maryland Tech Council, 30% of the life science job postings in the state, roughly 6,200 jobs, do not require a bachelor’s degree. At the same time, 40% of jobs in Maryland’s life sciences sector require a year or less of experience in the field. According to the council, the largest share of jobs posted in the state was in research, testing and medical lab positions. The pharmaceutical sector had the second-highest number of job openings, representing 34% of open positions.

“The BioHub Maryland Training and Education Center at Montgomery County will set the standard for excellence in life science talent development. We are building the biopharma workforce of the future in Rockville, and our doors are open to Marylanders of all educational backgrounds,” Maryland Tech Council Chief Executive Officer Kelly Schulz said in a statement.

While the life sciences market has emerged as a key sector of Maryland’s economy, there’s still room for the industry to grow. Various rankings of life sciences hubs generally rank the Washington D.C. metro area among the nation’s top life sciences hubs. Yet, it typically ranks behind cities such as Boston, San Francisco, and San Diego.

We have great universities that support (life sciences companies) in terms of researchers. We have more of an approach to commercialization than in years past. So that certainly helps… But it hasn’t quite hit the growth spurt … I think they’re still in the under-12 category, the pre-teen (category),” Irani said. “I think once it’s in the teenage years, they’ll begin to explode and grow.”