More on the economic fallout of pharma consolidation. New Jersey real estate types are concerned that big mergers will throw big blocks of vacant space--from office suites to manufacturing facilities--back onto the commercial market.
New Jersey is something of a pharma epicenter in the U.S. Big Pharma headquarters are clustered disproportionately in the area, making it the beneficiary of lots of drugmaker jobs and investment. That makes it vulnerable to drugmaker losses, however. The forthcoming combination of Pfizer and Wyeth, and Merck and Schering-Plough, will create lots of "overlap of facilities and operations" in New Jersey, a broker who represents all four companies told NJBiz.
"There's just excess capacity in the industry," Tim Bender, chair of a corporate real estate association and director of real estate at Merck, told the publication. Where, exactly, the cutbacks will come is up for debate. Only time will tell, really.
But there could be a silver lining to the mega-merger cloud. Smaller drugmakers could get great deals on Big Pharma's castoffs. "When the big boys leave town and the big plants get sold off," analyst Annette Kreuger told NJBiz, "that gives small companies the opportunity to purchase or lease a state-of-the-art facility that [they] most likely would never be able to afford under normal circumstances."
- read the NJBiz story