California + Bay Area + Healthcare | May 3, 2023

Life science real estate vacancies and leasing in the Bay Area are beginning to normalize to pre-pandemic levels, according to research from Transwestern

Bay Area Life Science Space Demand Normalizes to Pre-Pandemic Levels

Life science real estate vacancies in the Bay Area rose to 8.2% in the first quarter of 2023 from 6.1% in Q4, Transwestern’s George Entis reported. Normalizing demand for lab space, coupled with a deepening development pipeline, pushed vacancies up to pre-pandemic levels.

Q1 leasing activity was muted as the four-quarter total reached 1.6 million square feet, a 55.4% pullback from the year-ago period. Entis reported that rent growth moderated considerably from the “blistering pace” of a year ago, declining 28.9% year-over-year to $4.05 per square foot

Driven by biotechnology and other advancements, the Bay Area life sciences industry continues to see elevated levels of venture capital funding, which recorded $1.6 billion in capital flows in Q1. Although VC funding has gradually declined since peaking a year ago, capital invested in Q1 was comparable to pre-pandemic levels, reported Entis.

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Transwestern's Entis

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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