A new report from CBRE shows that life science lab space has emerged as a coveted sector of commercial real estate as increases in funding and employment have fueled both demand for lab space and construction of it in leading U.S. life-science markets.

Nationwide, Boston led the way in several key metrics, including demand, inventory and new construction in the 12 months ending March 2021, according to the report. Boston counts 4.75 million square feet of demand, 37.8 million square feet of existing inventory and 5.8 million square feet of construction in progress. Boston also topped the list in life science venture capital investment at $9.6 billion. In addition, the Boston market has one of the lowest vacancy rates in the country at 2.8%.

“Record-setting demand over the past 12 months is expected to continue, driving intense competition for lab space until 2022/2023 when new developments and conversions are delivered,” said Jonathan Varholak, a Vice Chairman at CBRE specializing in life-sciences and Boston-area real estate. “With limited space available in the near term in East Cambridge, leasing activity has picked up in surrounding life science clusters, including the Seaport, Watertown and the 128 West submarket. Demand has been fueled by continued venture capital funding for smaller companies emerging from incubators and from larger, mature biotech and pharma companies continuing to grow.”