Key Takeaways
- • Breakthrough Properties, a joint venture between Tishman Speyer and Bellco Capital, closed a $3 billion Breakthrough Life Science Property Fund, doubling its initial $1.5 billion target and establishing the largest real estate fund exclusively dedicated to life sciences, according to CBRE and JLL Research.
- • The fund has secured commitments from institutional investors, sovereign wealth funds, and high-net-worth individuals to finance life sciences real estate across the United States and internationally.
- • Breakthrough Properties currently operates a 4.6 million square foot development pipeline including a 515,000-square-foot, 10-acre campus in San Diego and a fully leased Boston property opening in 2022 for CRISPR Therapeutics.
- • U.S. lab space demand reached record highs with vacancy rates declining to 4.9 percent and a 19.7 percent increase in demand over a six-month period, driven by biotech and life sciences companies requiring physical facilities unsuitable for remote work.
- • NYC life sciences leasing hit 433,000 square feet in 2021, nearly tripling 2020 volumes and exceeding all leasing activity from the prior seven years combined, signaling geographic diversification beyond traditional Boston-Cambridge stronghold.
Summary
Tishman Speyer and Bellco Capital have successfully closed the Breakthrough Life Science Property Fund at $3 billion in direct capital and co-investments, substantially exceeding the joint venture's initial $1.5 billion fundraising target. The fund represents the largest real estate vehicle exclusively focused on life sciences to date, excluding recapitalizations of existing portfolios, according to research from CBRE and JLL. Breakthrough Properties CEO Dan Belldegrun stated the capital will be deployed "in support of the next generation of critical discoveries," underscoring the venture's strategic alignment with the expanding biotech and pharmaceutical sectors.
The capital raise reflects strong institutional confidence in life sciences real estate as a durable asset class. Breakthrough has attracted commitments from institutional investors, sovereign wealth funds, and wealthy individuals, demonstrating broad-based conviction around the sector's growth trajectory. The venture currently manages a 4.6 million square foot development pipeline spanning multiple geographies, including notable flagship projects such as a 515,000-square-foot, 10-acre campus in San Diego and a fully leased Boston property scheduled to open in 2022 as a dedicated facility for CRISPR Therapeutics.
Life sciences real estate has emerged as one of the pandemic era's most resilient property sectors, driven by the fundamental incompatibility of biotech research and development work with remote or hybrid arrangements. Market fundamentals remain exceptionally tight: a December CBRE report documented U.S. lab space demand at record levels, with vacancy rates compressed to 4.9 percent and demand increasing 19.7 percent over a six-month period. This supply-demand imbalance supports sustained rental growth and capital allocation to development.
Geographic expansion beyond legacy clusters is accelerating. While Boston-Cambridge remains the dominant life sciences hub, New York City experienced transformational leasing activity in 2021, with tenants occupying 433,000 square feet—nearly triple the 2020 volume and surpassing the entire sector's seven-year historical leasing aggregate. This geographic diversification validates the thesis underlying Breakthrough's multi-region capital deployment strategy and justifies the significant fund size relative to earlier life sciences real estate vehicles.
The capital raise reflects strong institutional confidence in life sciences real estate as a durable asset class. Breakthrough has attracted commitments from institutional investors, sovereign wealth funds, and wealthy individuals, demonstrating broad-based conviction around the sector's growth trajectory. The venture currently manages a 4.6 million square foot development pipeline spanning multiple geographies, including notable flagship projects such as a 515,000-square-foot, 10-acre campus in San Diego and a fully leased Boston property scheduled to open in 2022 as a dedicated facility for CRISPR Therapeutics.
Life sciences real estate has emerged as one of the pandemic era's most resilient property sectors, driven by the fundamental incompatibility of biotech research and development work with remote or hybrid arrangements. Market fundamentals remain exceptionally tight: a December CBRE report documented U.S. lab space demand at record levels, with vacancy rates compressed to 4.9 percent and demand increasing 19.7 percent over a six-month period. This supply-demand imbalance supports sustained rental growth and capital allocation to development.
Geographic expansion beyond legacy clusters is accelerating. While Boston-Cambridge remains the dominant life sciences hub, New York City experienced transformational leasing activity in 2021, with tenants occupying 433,000 square feet—nearly triple the 2020 volume and surpassing the entire sector's seven-year historical leasing aggregate. This geographic diversification validates the thesis underlying Breakthrough's multi-region capital deployment strategy and justifies the significant fund size relative to earlier life sciences real estate vehicles.
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