Boston recorded 2.3 million square feet of lab and R&D leasing activity in the first half of 2026, 37% above its pre-pandemic average, according to an Avison Young report.
BOSTON — Boston’s life sciences real estate market posted its strongest six-month leasing performance in four years during the first half of 2026, even as leasing activity across the U.S. remained well below pre-pandemic levels.
Boston recorded approximately 2.3 million square feet of lab and research-and-development leasing in the first half of the year, according to Avison Young’s H1 U.S. Life Sciences Market Report. The volume was 37% above Boston’s pre-pandemic six-month average and made the region the strongest-performing major life sciences market in the country during the period.
Nationally, U.S. lab/R&D leasing activity was 36% below the pre-pandemic average.
The report found that leasing demand over the past year has been concentrated primarily in Boston and the Bay Area, with Boston experiencing a particularly strong recovery. The city’s H1 leasing volume was its highest six-month total since 2022.
“Even as many markets face slower demand, companies are making meaningful commitments in Boston because of the region’s unmatched concentration of talent, research and investment capital,” said Tucker White, Avison Young’s U.S. Office and Life Sciences Lead, Market Intelligence. “Those advantages are helping Boston emerge as one of the clearest bright spots in the industry’s recovery.”
Boston also recorded the largest year-over-year increase in life sciences employment among major U.S. hubs, according to the report. The region has roughly 150,000 life sciences jobs and remains one of the country’s largest biotechnology clusters, with a high concentration of doctoral degree production.
Leasing favors institutional owners
The report also found a growing preference among life sciences tenants for properties owned by institutional investors and public real estate investment trusts.
Institutional and REIT-owned properties accounted for 86% of U.S. lab/R&D leasing activity since 2022, despite representing about 51% of the market’s inventory.
Avison Young attributed the trend in part to the newer laboratory space offered by many institutional owners and their access to capital, which has enabled them to offer substantial concessions to prospective tenants. In some cases, tenant improvement allowances have exceeded $400 per square foot.
At the same time, the national supply of available lab/R&D space has declined for four consecutive quarters. The report said the decline has been driven primarily by buildings being converted to office use and the removal of obsolete inventory rather than by a broad-based recovery in demand.
Supply remains elevated in several major markets. Boston, the Bay Area and San Diego together account for about 72% of the nation’s available lab space.
Raleigh-Durham was identified as one of the few major markets with relatively balanced supply and demand.
Rents continue to decline
Despite the improvement in leasing activity in Boston, broader market conditions remain challenging. Lab/R&D rents have declined over the past three years in every major U.S. life sciences market tracked in the report.
National Class A asking rents have fallen about 12% since the first quarter of 2025 after reaching a peak in the fourth quarter of 2024. Seattle and Philadelphia recorded the largest three-year declines, at 16.7% and 15.4%, respectively.
The report said newer-generation laboratory properties have experienced particularly strong pricing pressure as landlords compete for tenants amid elevated availability.
For Boston, however, the first-half leasing figures point to stronger demand than in most other major U.S. life sciences markets, with the region’s concentration of research institutions, specialized talent and investment capital continuing to attract companies despite broader challenges in the sector.
