Like other sectors of commercial real estate, biolab/life sciences space experienced some blowback from economic uncertainty and rising interest rates last year. For example, the fourth quarter 2022 market report from commercial real estate services firm CBRE notes that job growth slowed in the life sciences sector as companies looked to preserve cash on hand and that average vacancy on the national level rose by 60 basis points between the third and the fourth quarters, to 5.7 percent. Meanwhile, 1.4 million sq. ft. of new space was delivered to the market during just the fourth quarter.
Overall, however, life sciences real estate continues to be viewed as a sound bet on an alternative commercial real estate sector. The trick is to pick the specific properties you want to invest in wisely. That means taking into account market dynamics and the amount of demand those buildings are likely to generate in the near- and long term.
To that end, CBRE provides a deep dive into which cities are seeing the most interest from life sciences tenants right now, and how those statistics compare to the current market vacancy and amount of pre-leased space under construction. Here’s the breakdown of tenant demand dynamics in the 13 top life sciences markets in the country.