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Life Sciences, Funding and Real Estate: The 2025 Version
The life sciences sector faced plenty of headwinds in 2024, including geopolitical conflicts, a sluggish economy and ongoing high interest rates.
On the other hand, global venture capital increased (as did mergers and acquisitions), U.S. employment reached record growth, and the industry remains “in a period of unprecedented innovation and discovery,” according to CBRE’s “U.S. Life Sciences Outlook 2025” report.
Looking at 2025, CBRE and Cushman & Wakefield are forecasting continued funding flows to the sector with a potential “start of a CRE recovery,” according to Cushman & Wakefield’s “Life Sciences Funding in View: 2025 Outlook” write-up.
Funding: Still Going
Cushman & Wakefield and CBRE predict that venture capital and other funding to the life sciences sector—which began in 2024—should continue in 2025. Cushman & Wakefield analysts pointed to “investor enthusiasm for continued innovation in the sector” and said that ongoing economic strength drove capital to the sector in the past year. The trend will likely continue this year.
Meanwhile, CBRE analysts indicated that continued U.S. economic resilience should help drive life sciences revenues. Other industry positives introduced by CBRE include “thawing capital markets,” the above-mentioned record employment in the sector, increased demand for lab and R&D space and ongoing life sciences innovation in pharmaceuticals, cell and gene therapy and clinical trials.
Real Estate Impact
According to CBRE, life sciences lab and R&D property sales hit their lowest level in over a decade during 2024, “largely due to high interest rates and weak supply-and-demand fundamentals.” However, improved macroeconomic trends, greater demand and lower interest rates could drive more investment sales in 2025, though “the sector’s surge in new supply in H1 2025 will be a headwind,” CBRE analysts pointed out.
Cushman & Wakefield agreed with the assessment that deals should tick upward in the coming year, indicating that “improved deal activity in life sciences is anticipated to signal the start of a CRE recovery.”
And while CBRE pointed to a new surge in deliveries, Cushman & Wakefield analysts noted a definite pullback in the construction pipeline, “giving the sector some breathing room.” At the same time, leasing activity will likely pick up, leading to new space being absorbed in the coming year. “Well-capitalized companies are better positioned to make longer-term decisions, including increasing headcount and expanding their footprint,” Cushman & Wakefield analysts added.
- ◦Lease
- ◦Sale/Acquisition
- ◦Development
- ◦Financing
