BOSTON—Boston lab space availability rate remains high at 32% for the sixth consecutive quarter, with a large GMP sublease hitting the market for about 250,000 s.f., the largest space give-back in third quarter of this year, according to a report from JLL.
There is some good news but for the overall Life Sciences industry. Record funds are being raised by VC firms, which are up about 30 percent year-over-year across the U.S., with all macro indicators signaling optimism, which will soon be felt in the real estate market, JLL said.
Here are some other highlights from JLL report:
- Vacancy rates are expected to peak this winter before gradually declining, as asking rents have already decreased by 12% from their peak, returning to mid-2021 levels.
- Vertex and another large early renewal accounted for over 70% of the quarter’s 1.56 million s.f. of leasing volume in what is otherwise still a tepid easing market.
- The pipeline is 4.8 million s.f. today is the lowest since mid-2019. After a slew of deliveries in the next 3-4 months there will only be an additional 644,000 s.f. of additional speculative supply left through 2028 and beyond.
- Most metrics indicate a market in neutral neither worsening nor improving the oversupply dynamic in any real way.
- Even though the supply of lab R&D space has plateaued at around 16 million s.f., it is still 8x the amount of existing demand. In the years before COVID that ratio was 1.3x. 42% of 50 million s.f. of existing lab today has been completed in the last three years.
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