Life Sciences Market Normalizes in Q3 After Record-Setting 2021

U.S. Life Sciences | Q3 2022

November 2, 2022 2 Minute Read

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Executive Summary

  • U.S. life sciences employment increased by 5.4% year-over-year in Q3 2022. While year-over-year growth in the Biotech R&D sector remained high at 11%, it began to plateau in Q3 with little change between July and August.
  • Life sciences venture capital funding decreased by 29% quarter-over-quarter to $4.1 billion in Q3, in line with pre-pandemic levels.
  • The overall lab vacancy rate increased by 30 basis points (bps) quarter-over-quarter to 5.3% in Q3, largely due to new supply totaling 2.1 million sq. ft. outpacing absorption of 363,047 sq. ft.
  • The average lab asking rent of the top 12 U.S. markets increased by 6.8% quarter-over-quarter to $60.28 per sq. ft. NNN.
  • Under-construction lab space increased by 4.9 million sq. ft. quarter-over-quarter to 37.4 million sq. ft., 88% of which was being built on a speculative basis and 26.3% preleased.