Lab space across 12 largest US biotech hubs registered rent increase, vacancy decline even as headwinds challenged broader economy
Dallas – August 4, 2022 – Lab space across the 12 largest U.S. life sciences hubs made additional gains in the second quarter, including an increase in lease rates and a decrease in vacancy despite more construction activity, according to a new report from CBRE.
The average vacancy rate for U.S. life sciences space registered 5.2 percent in the second quarter, down from 5.3 percent a year earlier. Average asking rent in those 12 markets increased by 5.8 percent in the second quarter from the first to $54.77 per sq. ft.
Meanwhile, developers have ramped up construction in anticipation of more demand, boosting in-process construction to 31.3 million sq. ft. in the second quarter, a gain of 2 million sq. ft. from the first quarter total.
Those gains came as other indicators in the life sciences sector lost momentum. Venture capital funding has slowed this year, and initial public offerings by life sciences companies have fallen off dramatically amid a broader economic downturn.
“Few, if any, sectors are completely immune to economic cycles. Even so, the life sciences sector is buttressed by more fundamental, long-term shifts than most industries, such as advances in science and technology, expanding uses for biotechnology, and the long-term trend toward more individualized treatment,” said Matt Gardner, CBRE’s Americas Life Sciences Leader. “Indicators and market forces will shift on a quarterly or annual basis, but the underlying science continues to develop and expand.”
| Market | Market Size* | Vacancy | Sq. Ft. Under Construction | Sq. Ft. of Current Tenant Demand |
| Boston/Cambridge | 50.5M | 1.2% | 14.9M | 4.2M |
| Chicago | 2M | 33.6% | 281,000 | 980,000 |
| Denver/Boulder | 4.8M | 4.3% | 616,381 | 1.3M |
| Los Angeles | 8.7M | 10.8% | 793,904 | 934,000 |
| New Jersey | 20.4M | 7% | 147,000 | 1M |
| New York City | 2.5M | 5% | 860,403 | 2M |
| Philadelphia | 9.3M | 7.8% | 1.4M | 2M |
| Raleigh-Durham | 10.6M | 11.3% | 236,250 | 800,000 |
| San Diego | 22.9M | 9.7% | 1.2M | 700,000 |
| San Francisco Bay Area | 32.6M | 5.8% | 5.1M | 4.4M |
| Seattle | 9.3M | 9.7% | 1.2M | 700,000 |
| Washington, DC | 10.7m | 1.4% | 1M | 848,500 |
*In square footage of existing lab space. To read the full report, click here.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
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