Lab Vacancy Rate Hits Record Low in Q1 Despite Decrease in Life Sciences Funding

U.S. Life Sciences | Q1 2022

10 May 2022 1 Minute Read

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Executive Summary

  • U.S. life sciences employment increased by 5.4% year-over-year in Q1 2022, above its three-year average growth of 4.7%. The booming Biotech R&D sector had record 13.4% job growth.
  • After a record amount in 2021, venture capital funding for the life sciences sector slowed slightly to $6.5 billion in Q1, the second-highest first quarter total on record. Life sciences IPOs were down by 36.2% quarter-over-quarter in Q1.
  • The overall lab vacancy rate of the top 12 U.S. life sciences markets fell by 30 basis points (bps) in Q1 to 5.3%.
  • The average lab asking rent of the top 12 markets fell by 2.3% quarter-over-quarter to $51.42 per sq. ft. NNN, although half of those markets had increases.
  • Two-thirds of the 29.1 million sq. ft. of lab space currently under construction in the top 12 markets is expected to deliver in the next 12 to 24 months. Speculative construction made up 26.2 million sq. ft. of the total, with nearly 26% preleased.