March 6, 2025 — R&D facilities professionals seeking space may be interested to note that the U.S. life sciences real estate market posted positive net absorption in the fourth quarter (Q4) even as robust construction completions raised the sector’s vacancy rate to 19.7%, according to global commercial real estate services and investment firm CBRE’s new quarterly figures report.
Image courtesy of CBRE
The Q4 numbers indicate gradual improvement across the 13 largest U.S. life sciences markets and the potential for that momentum to carry through to this year. Leasing activity for lab space totaled 3.4 million sq. ft. in Q4, up 28% from a year earlier. The positive net absorption of 920,000 sq. ft. in Q4 — the difference between newly leased space and newly vacated space — is the third gain in the past five quarters.
The sector benefitted last year from record-high life sciences employment in the U.S., a number of new drugs receiving federal approval and a 19% year-over-year increase in venture capital funding for life sciences companies to $30.4 billion. Meanwhile, the primary factor boosting the national vacancy rate — a surge in lab construction that began during the pandemic — now is easing as construction completions deplete the construction pipeline. The 12.1 million sq. ft. of labs in progress at the end of Q4 is roughly two thirds less than at the peak in 2024.
Q4 market performance
On the market level, 10 of the 13 largest U.S. life sciences markets registered positive net absorption in Q4, led by the San Francisco Bay Area and San Diego.
Top life sciences markets: Select Q4 stats
| Market | Market Size* | Vacancy | Q4 Net Absorption* |
|---|---|---|---|
| Boston-Cambridge | 56M | 23.2% | (125,663) |
| Chicago | 2M | 40.5% | 78,400 |
| Denver-Boulder | 3.3M | 13.0% | 5,511 |
| Houston | 2.6M | 23.4% | 76,000 |
| Los Angeles | 6.2M | 8.0% | (5,986) |
| New Jersey | 18.9M | 11.3% | 92,110 |
| New York City | 2.9M | 9.4% | 95,947 |
| Philadelphia | 11.6M | 11.3% | 32,518 |
| Raleigh-Durham | 9.5M | 15.3% | (73,556) |
| San Diego | 27.3M | 19.7% | 339,748 |
| San Francisco Bay Area | 43.6M | 28.7% | 350,590 |
| Seattle | 9.4M | 13.0% | 7,170 |
| Washington, D.C. | 14.3M | 8.7% | 47,749 |
The U.S. Life Sciences | Q4 2024 report Executive Summary is available at CBRE.
