Key Takeaways
- • Breakthrough Properties, a joint venture between Tishman Speyer and Bellco Capital, closed a $3 billion fund for life sciences real estate—the largest dedicated fund in the sector, excluding recapitalizations of existing portfolios.
- • The fund doubled its initial target, raising capital from institutional investors, sovereign wealth funds, and high-net-worth individuals to finance both existing developments and new acquisitions globally.
- • Breakthrough currently operates 4.6 million square feet in its development pipeline across the United States and internationally, including a 515,000-square-foot campus in San Diego and a Boston property fully leased to CRISPR Therapeutics.
- • U.S. lab space vacancy has compressed to 4.9 percent with demand increasing 19.7 percent over a six-month period, while New York City achieved record life sciences leasing of 433,000 square feet in 2021—nearly triple the prior year and exceeding the entire sector's leasing from the previous seven years combined.
- • Life sciences real estate has emerged as one of the pandemic's hottest property sectors due to the inability of laboratory and research operations to function in remote or hybrid environments.
Summary
Breakthrough Properties, the real estate joint venture between Tishman Speyer and Bellco Capital, has successfully closed its inaugural dedicated life sciences real estate fund at $3 billion in direct capital and co-investments. According to CBRE and JLL Research, this represents the largest real estate fund exclusively dedicated to life sciences when excluding recapitalizations of existing portfolios. The fund exceeded its original capital target by 100 percent, demonstrating substantial institutional appetite for life sciences real estate.
The capital will be deployed to scale Breakthrough's existing platform and acquire new properties across the United States and internationally. The venture currently manages 4.6 million square feet in its development pipeline. Notable assets include a 10-acre, 515,000-square-foot campus in San Diego and a fully leased Boston property housing CRISPR Therapeutics, expected to open during the fund's deployment period. Breakthrough CEO Dan Belldegrun stated the firm looks forward to "putting these resources to work in support of the next generation of critical discoveries."
The fund's success reflects broader structural tailwinds in life sciences real estate. U.S. laboratory space demand reached record highs, with vacancy rates compressed to 4.9 percent and demand increasing 19.7 percent over a six-month period, according to CBRE research. New York City exemplified this trend, with tenants leasing 433,000 square feet of life sciences space in 2021—nearly triple the prior year and surpassing all leasing activity in the sector from the previous seven years combined. Boston-Cambridge remains the dominant market, but life sciences is experiencing significant geographic diversification.
This sector strength stems from the structural incompatibility of laboratory and research operations with remote work models. Unlike corporate office space, which benefited from pandemic-driven hybrid arrangements, life sciences facilities require in-person operations for experimentation, equipment use, and collaboration. This fundamental difference has insulated the sector from broader office market pressures and positioned life sciences real estate as a defensive, high-demand property class with limited supply expansion relative to tenant demand.
The capital will be deployed to scale Breakthrough's existing platform and acquire new properties across the United States and internationally. The venture currently manages 4.6 million square feet in its development pipeline. Notable assets include a 10-acre, 515,000-square-foot campus in San Diego and a fully leased Boston property housing CRISPR Therapeutics, expected to open during the fund's deployment period. Breakthrough CEO Dan Belldegrun stated the firm looks forward to "putting these resources to work in support of the next generation of critical discoveries."
The fund's success reflects broader structural tailwinds in life sciences real estate. U.S. laboratory space demand reached record highs, with vacancy rates compressed to 4.9 percent and demand increasing 19.7 percent over a six-month period, according to CBRE research. New York City exemplified this trend, with tenants leasing 433,000 square feet of life sciences space in 2021—nearly triple the prior year and surpassing all leasing activity in the sector from the previous seven years combined. Boston-Cambridge remains the dominant market, but life sciences is experiencing significant geographic diversification.
This sector strength stems from the structural incompatibility of laboratory and research operations with remote work models. Unlike corporate office space, which benefited from pandemic-driven hybrid arrangements, life sciences facilities require in-person operations for experimentation, equipment use, and collaboration. This fundamental difference has insulated the sector from broader office market pressures and positioned life sciences real estate as a defensive, high-demand property class with limited supply expansion relative to tenant demand.
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