CONTACT US
Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting cushmanwakefield.com to read:%0A%0A {0} %0A%0A {1}

Slowing Construction and Rising Capital Flows Set Stage for Life Sciences Market Rebound

Michael Boonshoft • 3/5/2025

CHICAGO, March 4, 2025 – The life sciences real estate market is undergoing significant changes as supply outpaces demand, influencing rental growth, vacancy rates, and investment trends.  

The overall vacancy rate across major life sciences markets reached 20.5% in Q4 2024, up 250 basis points from Q2 2024. The total U.S. market saw negative net absorption for the second consecutive year, though key markets like Boston, Chicago, and Los Angeles-Orange County posted positive absorption in 2024. 

The U.S. life sciences construction pipeline has contracted significantly, with just 2 million square feet (msf) expected to be delivered beyond 2025, down from 16 msf currently under construction. At present, supply continues to exceed demand, leading to softer asking rent growth and higher vacancy rates across key markets. However, a slowdown in new construction is expected to restore balance between supply and demand. 

“Despite short-term challenges, the sector is adjusting to market conditions as construction pipelines slow and capital investment gains momentum,” said Sandy Romero, Research Manager. “Occupiers seeking to expand or relocate in 2025 will benefit from an increased number of leasing options.” 

Asking rent growth has softened, averaging 3% year-over-year (YOY) but remains 22% higher than in 2022. Some markets posted strong YOY rent growth, including Denver (+26%), Los Angeles-Orange County (+18%), and Chicago (+13%). Others, such as New York City (-14%) and Boston (-11%), saw declines. 

U.S. Capital Markets 

Sales volume is rising in 2025 as the broader commercial real estate market recovers. Capitalization (cap) rates remain elevated as investors weigh income potential and debt costs, while total returns have been negative for three consecutive years, mirroring broader property sector trends. 

“While the market faces near-term challenges, long-term fundamentals remain strong. The demand for cutting-edge lab and research space, combined with strategic investment shifts, will continue to shape the life sciences real estate landscape through 2025 and beyond,” said Romero.  

Read the full report to learn more.

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2024, the firm reported revenue of $9.4 billion across its core service lines of Services, Leasing, Capital markets, and Valuation and other. Built around the belief that Better never settles, the firm receives numerous industry and business accolades for its award-winning culture. For additional information, visit www.cushmanwakefield.com

With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on  Cookies

More Options
Agree and Close
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All
SAVE SETTINGS