The rapid expansion of biotech-driven lab real estate in key markets such as Boston, San Diego, and the Bay Area is facing a pronounced slowdown. Leasing activity, which surged during the pandemic and into 2022, has declined significantly, with vacancy rates in some premier clusters now approaching 30 percent. This softening is largely driven by tighter venture capital funding, particularly for early-stage firms, coupled with an oversupply of speculative lab developments and an increase in sublease availability, which together are exerting downward pressure on rents and absorption rates.
For life science real
estate, the slowdown represents a market correction with tangible
implications for landlords and investors. Properties designed
specifically for lab use like wet labs, clean rooms, and other
specialized facilities, carry high infrastructure costs that cannot
easily be repurposed, leaving landlords with underutilized inventory and
constrained revenue streams...
RSK: It was overbuilt for a while, but new construction has slowed down, so demand is catching up. I hope so for Velocity Station`s case on Odana Rd.
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- - Volume: 25 - WEEK: 39 Date: 9/26/2025 2:07:19 PM -