Life science construction completions will peak this year, then drop off substantially

There will be a record amount of construction completions in the U.S. life science market in 2024, followed by a dramatic drop in 2025, according to CBRE.

In 2024, 21.3 million sf of life science space will be completed in the 13 largest U.S. markets. That’s up from 13.9 million sf last year and 5.6 million sf in 2022.

Much of the projected slowdown is due to a softer economy and reductions in venture capital investment and initial public offerings. Most of the construction scheduled for completion this year, 79%, is in the three largest biotech hubs: Boston, the San Francisco Bay Area, and San Diego.

The potential for a high vacancy rate in those areas is greatest, while supply and demand is expected to remain more balanced in the 10 other primary markets. The average vacancy rate in the 13 markets stood at 10.6% as of the third quarter of 2023.