Demand for U.S. Life Sciences Space Spikes 28 Percent Annually in Late 2024

CBRE`s latest market data shows the U.S. life sciences real estate sector posted positive net absorption in Q4 of 2024, even as an increase in construction completions pushed the vacancy rate to 19.7%.

The fourth-quarter figures reveal gradual improvements across the 13 largest life sciences markets, with momentum likely to continue into 2025. Lab leasing activity reached 3.4 million sq. ft., marking a 28% year-over-year increase. Net absorption totaled 920,000 sq. ft. -- the third gain in five quarters -- indicating healthy demand for lab spaces despite market challenges.

Several factors fueled this progress in 2024, including record-high life sciences employment, numerous new federal drug approvals, and a 19% year-over-year increase in venture capital funding, totaling $30.4 billion. Additionally, lab construction surges that began during the pandemic are tapering off, with ongoing projects dropping to 12.1 million sq. ft. by the end of Q4 -- nearly two-thirds lower than the 2024 peak.


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RSK: A little bit of good news but a large number of new sq. ft. is due to be completed in 2025 so this will bring up the vacancy rate once again.