Demand for new lab space has plummeted by more than half since the end of 2021, and life science vacancy rates are the highest they’ve been in a decade amid the biotech industry’s ongoing downturn, according to a report released Tuesday by Jones Lang LaSalle, a commercial real estate services company
Tenant demand, measured by the total amount of new space that companies are looking to lease, dropped from 25.3 million square feet at the end of 2021 to 10.1 million square feet by the second quarter of this year across eight top life science markets: Boston, the Bay Area, San Diego, Raleigh-Durham, Philadelphia, Seattle, Los Angeles, and the Washington, D.C., area.
The real estate numbers presented in JLL’s annual life sciences report are yet another sign that the biotech industry, which outperformed the broader market for years, is in the midst of a slowdown. Lab space is increasingly going unused amid a supply glut, and more companies are looking to sublease space. Real estate observers say there are some signs these trends could turn around in the next year or two, though that is far from certain.
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