New Fund to Invest $300M in Life Sciences RE

Scheer Partners has joined forces with The JBG Cos. on the creation of a new $100 million fund that will target life sciences real estate. Greater Washington Life Sciences Fund will allow for the investment of $300 million in properties across the Metropolitan Washington, D.C., region over the next three years. The fund’s activities will run the gamut from acquisitions of existing properties to redevelopments to new ground-up construction projects. Scheer is a specialist in this real estate sector, having completed over 500 projects with life sciences entities since its inception in 1991. The company’s leasing acquisition, design and construction endeavors account for over 6.2 million square feet. While the investment vehicle will look at areas in the District and Northern Virginia, a great deal of its pursuits will likely to center on the Interstate 270 bio-corridor in Montgomery County, which is the main local hub for life science activity. Spurred in no small part by the proliferation of federal government and research institutions, the Washington, D.C., area is one of the nation’s life sciences clusters and a significant increase in demand for life sciences real estate accommodations is on the horizon, according to Henry Bernstein, senior vice president with Scheer. “We have, for several years, had quite a supply of existing space on the market, but our projections for the trend in the next two years is existing space is going to be absorbed,” Bernstein told CPN today. “Quite a bit of action is going to occur in this industry, and this is a very robust life sciences area.” The fact that the National Institutes of Health’s headquarters is located in Bethesda, Md., has always been a draw for life sciences businesses–the Washington, D.C.-area ranked four out of the nation’s nine main life sciences clusters in the receipt of NIH funding in 2006, according to a report by real estate services firm Jones Lang LaSalle. And potential political shifts could mean that NIH will become an even greater magnet for pertinent businesses to set up shop in the area. “Changes in the administration,” Bernstein said,” will cause NIH’s budget to recover.” Indeed, while financial investment in the industry from other sources remains strong, funding from the NIH has dwindled greatly after years of increases in the double digits, according to the JLL report. Headquartered in Rockville, Md., Scheer is a fully integrated commercial real estate services company. Over the last 17 years, the firm has represented clients in leasing activities involving 18.7 million square feet of office and R&D/industrial space, and has posted approximately $1 billion in sales. Chevy Chase, Md.-based JBG is a fully integrated investment, management and development concern focusing on the Metropolitan Washington, D.C., area. The company, which develops and owns real estate types ranging from office and residential to hotel and retail, has over $10 billion in assets under management and development.