Lab/R&D Vacancy Rises Despite More Favorable Life Sciences Industry Conditions

Executive Summary

• The lab/R&D vacancy rate for the top 13 life sciences markets increased by 30 basis points (bps) to 23.2% in Q1 after declining last quarter for the first time since 2022.
• Nine of the 13 major markets recorded negative net absorption totaling 1.2 million sq. ft., including Boston-Cambridge, the San Francisco Bay Area and San Diego.
• Average triple-net asking rent for lab/R&D space declined to $67.30 per sq. ft., the fifth consecutive quarterly drop.
• Space under construction increased to 4.7 million sq. ft. in Q1 with the start of a 700,000-sq.-ft. project in Los Angeles.
• Biotech R&D employment rose for the fifth consecutive month to a record level in February.
• Venture capital investment of $7.4 billion in Q1 aligned with the two-year quarterly average, as funding over the past year reached its highest level since 2022.