Lab/R&D Absorption Turns Positive; Vacancy Rate Dips
Source: CBRE Research, Q3 2026.
Net Absorption Turns Positive
Source: CBRE Research, Q3 2026.
Net absorption turned positive in Q3 2026 at 569,257 sq. ft. after two straight quarters of negative demand. The San Francisco Bay Area had positive net absorption but Boston-Cambridge and San Diego saw mild declines. New York City recorded its highest quarterly net absorption on record, driven in part by the sale a sizable lab building for owner occupancy.
Leasing Activity Increases
Source: CBRE Research, Q3 2026.
Leasing activity totaled 2.7 million sq. ft. in Q3 2026, up by 6.6% from Q2 and 12.7% from Q3 2025. Q3 leasing was in line with the quarterly average since Q1 2023. Tenants continue to transact at a steady pace, but not enough to rapidly reduce available space.
Vacancy Rate Declines for Second Time in Last Year
The vacancy rate edged down by 10 basis points (bps) quarter-over-quarter to 23.4%—only the second quarterly decline since late 2022. Although the vacancy rate is up by 60 bps year-over-year, the rate of change has slowed considerably from the 440-bp year-over-year increase in Q3 of last year.
Construction Completions Down by 44% From a Year Ago
Source: CBRE Research, Q3 2026.
Construction completions fell by 44% year-over-year but more than doubled from last quarter. Most of this new space in Q3 was delivered in Boston-Cambridge and was 90% preleased, causing little effect on the overall vacancy rate. Over the past year, 3 million sq. ft. has been delivered—the lowest annual total since 2017.
Average Asking Rent Continues to Fall
Average asking rent fell by 7.2% year-over-year in Q3, the sixth consecutive quarter of decline. The U.S. average asking lab/R&D rent was at its lowest level since mid-2023. Boston-Cambridge and the San Francisco Bay Area had slightly sharper year-over-year declines, with Houston seeing the steepest drop at -14.1%.
Annual Investment Volume Remains Subdued
Note: Reflects core U.S. life sciences markets including Boston-Cambridge, San Francisco Bay Area, San Diego, Washington, D.C.-Baltimore, Philadelphia, Raleigh-Durham, and Seattle.
Sales of lab/R&D properties declined in Q3 to the lowest level in more than six years. Annual sales of $757 million through Q3 reflect a 94% drop from the $13.2 billion peak in Q3 2022. Despite stabilizing supply and demand, the slowdown in investment activity reflects continued caution by investors.
Q3 Vacancy & Leasing Activity for Top Life Sciences Markets
*Vacancy rate for New York City is an “occupancy-ready, built availability rate” (lab exclusive space that is currently within 12 months of tenant fit out only).
Source: CBRE Research, Q3 2026.
Contacts
Related Research
-
Article | Evolving Workforces
Business Insights | Mitigating the Hidden Real Estate Costs in Life Sciences M&A
June 26, 2026
Serial life sciences acquirers risk stranding acquired biotechs. Here's a CRE playbook to integrate them without disrupting scientific momentum.
-
Six talent trends reshaping U.S. life sciences property demand in 2026, from hiring recovery to secondary market growth.
-
Explore the forces driving the life sciences recovery. Lab construction is easing while capital markets signal upside—see what's driving the life sciences inflection point