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Lab Vacancies Tick Up from All-Time Low in Top 13 Life Sciences Markets
Lab vacancy increased across the top 13 U.S. life sciences markets in the first quarter of 2023, providing relief for companies that had found little available space in recent years, CBRE reported.
Average vacancy of 6.7% in Q1 marked an increase of 170 basis points from a year earlier. That compares to an average of 7.7% in Q1 2020, before the pandemic sparked a wave of activity in the life sciences sector. The low point for vacancy, 4.6%, occurred in Q2 last year.
Other measures in Q1 indicated a sector cooling to red hot from white hot. Despite announcements of layoffs, U.S. life sciences employment increased year-over-year by 3.5% in February, exceeding the overall job-growth rate of 2.9%. Average rental rates increased by 3.2% from Q4 2022 to a record $65.62 per square foot in Q1 2023.
“Most measures of the life sciences market remain at or above pre-pandemic levels, demonstrating that this is a market buttressed by demand,” said Matt Gardner, CBRE Americas Life Sciences Leader. “There is a lot of promising science in the pipeline, and the sector likely will regain momentum once the lending market recovers. Meanwhile, companies of all sizes are likely to find at least a few available spaces in markets where there previously was little or no such availability.”
- ◦Lease
