Adaptive Spaces
2025 U.S. Life Sciences Incubator Survey
Incubators Remain Vital to Life Sciences Ecosystems
April 4, 2025 6 Minute Read
Executive Summary
CBRE surveyed 18 life sciences incubator operators to identify trends and examine how sentiment has changed over the past year.
Key findings:
- Incubators are a critical part of life sciences ecosystems, fostering young companies, but there is a need for even more offerings from incubators.
- More than 60% of survey respondents expect to secure more funding this year, although, since the survey was conducted, the federal government has proposed to freeze certain grant funding.
- Strong leadership and qualified employees, a sound business plan and a compelling product offering are key contributors to the success of life sciences startups.
- Incubators generally maintain their relationships with the startups they foster long after those companies become fully established and profitable.
The Need for Incubators
Seventy-eight percent of respondents said they expect to increase their number of locations in the next five to 10 years, up from 65% of respondents to last year’s survey.
Twelve of the 18 incubators surveyed by CBRE have been in business for more than 10 years, demonstrating consistent demand for these facilities. Nearly 90% of those surveyed indicated that their facilities were at least 50% occupied, with more than 60% reporting occupancy levels of between 75% and 100%. Seventy-eight percent of respondents said the average size of their incubator facilities was at least 25,000 sq. ft., with 50% expecting that number to increase over the next five to 10 years. Respondents to our 2024 survey were split on having space above or below 25,000 sq. ft., though most also expected their space to grow in the next five to 10 years.
Figure 1: What is the average size in sq. ft. of your incubator?
While longevity of the incubator model and high occupancy rates underscore the demand for these types of facilities, incubators provide more than just a space to work. All but one survey respondent said that the primary role of their incubator was to provide accessible office and lab space, while 72% said content and programming were also primary roles, followed by mentoring. Community and training were also noted.
Figure 2: What are the primary roles of your incubator?
Many respondents indicated a need for additional service offerings by incubators. These include connecting startups to funding sources and the broader life sciences ecosystem, an expansion in programming, including more service offerings to assist in the operational aspect of running a company, integrating new technology, flex options for growth and upgrades within the space, and inclusion of medical devices and manufacturing support.
Where do you see the biggest room for innovation in the incubator space?
“Incubators need to engage younger innovators to get them inspired and into the design thinking space.”
Real Estate and Fee Strategy
Incubators generally lack a consistent real estate or fee strategy.
Fifty percent of respondents wholly own their facilities compared with only 33% in our 2024 survey, while 28% leased their facilities compared with 48% last year. Sixty-one percent of respondents said their incubators charge their tenants with monthly rent, while some charged per bench/suite or a mixed fee. Fees are often driven by real estate market rates and space size, but 50% of respondents claim the average company in their space pays less than $5,000 per month.
Figure 3: Do you own or lease your locations?
Incubators prefer locations near educational institutions and major medical facilities.
Sixty-seven percent of survey respondents said they prefer locating near educational institutions, down from 86% in our 2024 survey. There was a corresponding increase in the preference for location near major medical facilities, cited by 44% of survey respondents this year compared with only 29% last year. Other important amenities for incubators are housing, public transit, retail offerings and a local investor community.
Figure 4: What local amenities do you look for when opening your incubator?
Source: U.S. Life Sciences Incubator Survey, CBRE Research, February 2025.
Funding
Different funding sources offer potential for growth but also have potential challenges.
Sixty-seven percent of survey respondents said they receive rent from their tenants, while 61% said they receive government funding. Thirty-three percent of respondents said they are self-funded, while only 6% said they receive venture capital funding.
Sixty-one percent expect funding to increase over the next five to 10 years, while 28% believe it will remain the same. Only two respondents believe funding will decrease, although the survey was conducted prior to the government’s proposed freeze on federal grants.
Figure 5: Where does the funding for your incubator come from?
Incubator Ecosystem
Life sciences incubators accommodate startups in a diverse range of industries.
Medical device/medtech and biotech companies are the most common, cited by 83% of survey respondents. Sixty-seven percent accommodated pharma companies, while the number accommodating AI-related companies grew to 50% this year.
Figure 6: What industries are housed in your incubator?
People, Plan, Product
Most startups stay in incubator facilities for at least two years to fully determine their viability. Following are the top three factors cited by survey respondents for potential success of their incubator tenants:
-
People
Meaning both strong leadership and a team with good dynamics and expertise in their field. While some respondents noted strong leadership as an experienced C-suite, others noted willingness by those leaders to be coached. -
Plan
Meaning a sound business strategy emphasizing cash flow management, adequate funding and solid growth prospects. -
Product
Meaning a compelling offering using intellectual property-backed science and having the ability to pivot based on new data.
Several respondents also noted success with companies that fully utilize the resources given to them both by the incubator and by the local ecosystem, further bolstering incubators as a critical part of the life sciences community.
What are the key qualities of successful companies?
“A good plan, a good team and a big market opportunity.”
Post-Incubator Connectivity
Incubators’ relationships with the startups they foster generally continue after the company has outgrown the incubator.
Eighty-three percent of survey respondents said that they assist their startups with securing their next lab/office. Thirty-three percent of respondents said they follow-up annually with their former startup tenants, while 17% said they do so quarterly and 44% said it fluctuates.
Incubators also keep track of their former startups’ activity, with 67% tracking exits/acquisitions, 44% tracking funding and 39% tracking both employee trends and five-year survival rates. More than 60% of respondents reported that over 50% of their startups graduate from incubator status, with 41% reporting that 75% to 100% of their graduates are still in business.
Figure 7: What information do you track on graduated companies?
Methodology
CBRE’s 2025 U.S. Life Sciences Incubator Survey was conducted from November 2024 through January 2025. Half of the 18 incubators included in our survey have multiple locations, with 22% having more than three.
Forty-four percent are independent or private, 11% are supported by educational institutions and 22% by state or county governments or economic development organizations.
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Figures
Life Sciences Market Ends 2024 With Improved Absorption & New Leasing Activity
January 31, 2025
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.
Life Sciences
Contacts
Matthew Gardner
Americas Advisory Leader Life Sciences
Mark Vito
Portfolio Strategy Manager / Occupier Growth & Business Development | Advisory Life Sciences
