Chapter 3
Potential for Increased Investment Activity in 2025
U.S. Life Sciences Outlook 2025
2 Minute Read
Sales transactions of life sciences lab/R&D properties hit their lowest level in over a decade in 2024, largely due to high interest rates and weak supply-and-demand fundamentals.
CBRE Research projects marginally higher investment sales in 2025 for all commercial real estate sectors based on improved macroeconomic trends, lower interest rates and greater demand. Life sciences investment activity may see a slight uptick, although the sector’s surge in new supply in H1 2025 will be a headwind.
Figure 28: Annual Investment Volume of R&D Properties
While conventional office properties have seen cap rates jump to levels not seen in over a decade, cap rates for life sciences properties appeared to stabilize in 2024 and remained below levels a decade ago.
CBRE expects the 10-year Treasury yield to remain above 4% in 2025, suggesting that any potential decline in life sciences cap rates will be marginal.
Figure 29: Average Cap Rates for Office and R&D Properties
Related Insights
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Figures
Life Sciences Market Ends 2024 With Improved Absorption & New Leasing Activity
January 31, 2025
Despite net absorption of more than 920,000 sq. ft. in Q4, the overall lab/R&D vacancy rate rose by 1.2 percentage points to 19.7% due to 3.4 million sq. ft. of vacant deliveries.
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Despite many uncertainties, the U.S. economy is poised for growth in 2025, driven by consumer spending, easing financial conditions and productivity gains.
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Companies have many ways to prepare life sciences real estate portfolios for AI’s future requirements, while maintaining flexibility in the interim.
