Bay Area Life Sciences Figures Q3 2026

The San Francisco Bay Area life sciences market showed signs of stabilization in Q3 2026. Overall vacancy held essentially flat at 30.7%, and net absorption turned positive at 85,500 sq. ft., the first quarterly gain of the year after a combined 982,000 sq. ft. of negative absorption in Q1 and Q2. Leasing activity rose 11% quarter-over-quarter to 919,000 sq. ft., up 77% from a year ago, led by Silicon Valley and the San Francisco Peninsula.

The recovery remains uneven and tenant-favorable. Average direct asking rents fell 2.6% quarter-over-quarter to $5.39 per sq. ft. monthly NNN, down 17% from the Q1 2025 peak, as landlords compete to fill space left over from the 2021 to 2022 speculative construction wave. Venture capital remains concentrated in mega-rounds for later-stage companies, NIH funding recalibration continues to weigh on early-stage and academic spinouts, and tariff uncertainty and elevated borrowing costs keep occupiers cautious about committing to new footprints.

Supply-side conditions, however, are clearly improving. With the final 138,500-sq.-ft. delivery on the Central Peninsula this quarter, no life sciences space is under construction in the Bay Area for the first time since early 2022. Sublease availability fell 3.2% to 2.5 million sq. ft., its lowest level since late 2023, and demand from adjacent sectors such as photonics, semiconductors, and advanced manufacturing is helping to backfill R&D space.