Life Sciences Vacancy Rates Hit Record High, Deflating Rents

Life sciences market vacancy rates in the US reached a new high of 23.9% in Q2, leading to further softening in asking rents and concessions. The construction pipeline accounts for 3% of inventory, with 63% of the space under construction already pre-leased, signaling a shift from speculative to build-to-suit construction. Asking rents for lab and cGMP space grew 0.7% from the end of 2024, while rents in some key markets, such as Boston and San Francisco, experienced declines.

Life sciences market vacancy rates in the US reached a new high of 23.9% in the second quarter of 2025, according to a recent report by Cushman & Wakefield. This increase led to further softening in asking rents and concessions, as the market continues to grapple with soft demand and a wave of vacant new construction completions Life sciences markets hit vacancy rate highs, deflating rents^[1].

The U.S. life sciences vacancy rate rose by 70 basis points quarter-over-quarter and 520 basis points from a year ago. The construction pipeline, which accounts for 3% of inventory, indicates a shift from speculative to build-to-suit construction, with 63% of the space under construction already pre-leased Life sciences markets hit vacancy rate highs, deflating rents^[1].

Asking rents for lab and Current Good Manufacturing Practice (cGMP) space grew by an average of 0.7% from the end of 2024 across 16 major markets examined by Cushman & Wakefield. However, rents in some key markets, such as Boston (-1.3%) and San Francisco Bay Area (-2.1%), experienced declines. Vacant sublease space increased by 10 basis points in the quarter to 4.0%, contributing to lower average asking rents Life sciences markets hit vacancy rate highs, deflating rents^[1].

The slowdown in construction, currently at its lowest level since 2019 at just under 8 million square feet, is expected to help the market absorb the vacant space delivered over the past two years. This should help normalize high vacancy rates in some markets over the longer term Life sciences markets hit vacancy rate highs, deflating rents^[1].

Although asking rents are expected to further soften this year, the trend is not expected to persist long-term. The softening should ebb as uncertainty subsides, according to the report. Even with the softening, rents in the sector still command a premium over office rents, with life sciences rents being 31% higher than office rents in the 12 U.S. markets tracked by Cushman & Wakefield. This premium is even more pronounced in Boston (75%) and San Diego (70%) Life sciences markets hit vacancy rate highs, deflating rents^[1].