Life Sciences Market Ends 2024 With Improved Absorption & New Leasing Activity

Executive Summary

• Despite net absorption of more than 920,000 sq. ft. in Q4, the overall lab/R&D vacancy rate rose by 1.2 percentage points to 19.7% due to 3.4 million sq. ft. of vacant deliveries. This was the vacancy rate's smallest quarterly increase since Q3 2022.
• Total leasing activity grew by 10% quarter-over-quarter to 3.4 million sq. ft., with new leases and expansions up by nearly 22%. Annual leasing activity increased by 23% to 11.7 million sq. ft.
• Average asking rent increased by 2% quarter-over-quarter to $74.21 NNN per sq. ft., mainly due to new supply deliveries.
• Total lab/R&D space under construction fell to 12.1 million sq. ft. in Q4, the lowest quarterly total since Q1 2020. Five million sq. ft. of new lab/R&D space was delivered in Q4, 32% of which was preleased.
• Venture capital funding for life sciences companies fell by 36% quarter-over-quarter to $5.6 billion but increased by 19% for the full year to $30.4 billion.
• Total life sciences employment hit a record high in November, while biotech R&D employment hit a record high in October and then dropped slightly in November. For the year, biotech R&D employment growth outpaced total nonfarm employment growth by over 120%.