Despite Economic Headwinds, Life Sciences Market Finishes 2022 with Solid Fundamentals

Executive Summary

• The rate of life sciences employment growth slowed in Q4 as companies reduced job openings and laid off staff to maintain cash flow.
• Growth in venture capital funding resumed in Q4 and exceeded pre-2020 levels.
• Vacancy rose across most markets, bringing the national average to 5.7% in Q4 from 5.1% in Q3. However, this was the same rate as a year ago and less than any quarter before 2021. This suggests vacancy is beginning to return to normal levels after the frenetic activity of 2021 pushed vacancy to historic lows.
• The average asking rate hit a record-high $62.16 per sq. ft. NNN, driven by record levels of new premier lab space construction.
• Lab space under construction as of Q4 is two and a half times more than in 2020 and up by 8 million sq. ft. from Q4 2021. Nearly 1.4 million sq. ft. was delivered in Q4 2022 alone.