The Bay Area life science market, already the largest in the nation, has seen exponential growth  in the last five years, according to a Cushman & Wakefield report. Building inventory has grown by 21%, but demand is outpacing existing supply in most regions 2-to-1. 

Real estate developers are working to keep up with the demand, as the current construction pipeline includes 2.7 million square feet of projects, 53% higher than in 2020. Of the 426,000 square feet of space due to be delivered this year, 76% is already pre-leased.

The fly in the ointment is current volatility in the equity markets, which is creating a cash crunch for biotech companies whose market cap has fallen below their cash on hand. Nonetheless, the Bay Area market continues to be a magnet for life sciences investment, with over $8.1 billion in venture capital funding in 2022 so far. 

The Cushman & Wakefield report concludes that despite the economic volatility, the ongoing influx of life sciences capital should continue to drive demand for lab space, ensuring that new spec space delivered will be quickly snapped-up.