In a recent analysis by CBRE, the U.S. life sciences real estate market demonstrated robust growth, with a reported positive net absorption of 920,000 square feet in the fourth quarter of 2024. This growth comes despite an increase in the vacancy rate to 19.7%, attributed to significant construction completions [eca45184].
Leasing activity for lab space surged to 3.4 million square feet, marking a 28% increase year-over-year. This uptick in leasing is reflective of the sector's strong performance, bolstered by record-high life sciences employment and a notable 19% rise in venture capital funding, which reached $30.4 billion [eca45184].
As of the end of Q4 2024, there were 12.1 million square feet of labs under construction across the U.S. Notably, 10 of the 13 largest life sciences markets reported positive net absorption, with the San Francisco Bay Area and San Diego leading the charge [eca45184].
Looking ahead, CBRE's 2025 U.S. Life Sciences Outlook predicts continued growth driven by an improving economy and strong sector employment. However, there are concerns regarding the forecasted completion of 8 million square feet of lab space in 2025, which could lead to higher vacancy rates in key markets [eca45184].
This analysis aligns with recent developments in the UK life sciences sector, where significant investments, such as Prologis' £500 million commitment to the Cambridge Biomedical Campus, are expected to enhance job creation and economic contributions [6f949c4]. The UK government is actively fostering an environment conducive to growth in life sciences, paralleling trends observed in the U.S. market [6f949c4].
