BOSTON — Boston’s life sciences real estate market remains firmly in tenants’ favor, but new data from Colliers suggests the sector may be beginning to stabilize after two years of rising vacancies and slowing demand.
According to Colliers’ latest Boston Life Sciences Market Report, more than 20 million square feet of laboratory and life sciences space—approximately 35% of the region’s inventory—is currently available for lease, the largest volume of vacant life sciences space in the United States both in absolute terms and as a percentage of inventory. Nearly 80% of that availability is direct space being marketed by landlords, much of it located in newly completed buildings that have yet to secure their first tenants.
Despite those historically high vacancy levels, Colliers points to several encouraging trends that suggest the market may be approaching a turning point.
Supply Pipeline Begins to Normalize
One of the primary drivers behind Boston’s elevated vacancy rate has been an unprecedented wave of speculative laboratory construction. As those projects delivered into a slowing market, available space climbed rapidly.
That dynamic is beginning to change.
Only 2.8 million square feet of life sciences space remains under construction, and nearly 90% of that pipeline is either preleased or being developed as build-to-suit projects, significantly reducing the likelihood of another wave of speculative vacancies entering the market.
The report also notes that much of the space being vacated by companies relocating into those new facilities has already been listed for lease, allowing the market to better absorb future availability.
Perhaps most encouraging, Boston posted positive net absorption during the second quarter, marking the first time in two years that tenant demand outpaced new deliveries. As a result, vacancy rates edged lower for the first time in several quarters.
Tenants Hold the Advantage
While market fundamentals are improving, landlords continue to compete aggressively to attract tenants.
More than 16 million square feet of direct available space remains on the market, prompting many property owners to reduce asking rents while significantly increasing concession packages.
In Cambridge, one of the nation’s premier life sciences clusters, the weighted average asking rent has fallen approximately 25% from recent highs.
Landlords are also offering historically generous tenant improvement packages. According to Colliers, allowances for long-term leases on first-generation laboratory space now typically range between $325 and $400 per square foot—roughly double what tenants could expect just four years ago.
To further differentiate their properties, many owners are investing in prebuilt speculative laboratory suites that allow companies to occupy space more quickly while reducing upfront construction costs.
Some landlords are also expanding their marketing efforts beyond traditional life sciences users by pursuing tenants from other industries where appropriate.
Leasing Activity Signals Renewed Momentum
Several major lease transactions completed during the second quarter helped stabilize market fundamentals and demonstrated that demand remains strong among established life sciences companies.
Among the largest transactions:
- TransMedics signed a 500,000-square-foot lease for its new global headquarters at 188 Assembly Park Drive in Somerville.
- Sanofi completed an early extension of its Cambridge Crossing campus, including its 510,000-square-foot facility at 350 Water Street.
- AdvanCell announced plans for a new 128,000-square-foot global headquarters and manufacturing facility at IQHQ’s 1 Corporate Drive in Andover.
- Stoke Therapeutics leased 98,500 square feet at 245 Fifth Avenue in Waltham.
- Zealand Pharma signed a 53,000-square-foot lease in Cambridge’s Alewife district for a new U.S. research hub.
- The ALS Therapy Development Foundation expanded its presence by leasing 33,000 square feet at Arsenal Yards in Watertown.
Collectively, these transactions helped offset new deliveries and contributed to the market’s first quarter of positive absorption since 2024.
Funding Environment Still Presents Challenges
Although leasing activity has improved, Colliers cautions that several headwinds continue to limit broader market recovery.
Venture capital funding remains below peak levels, with fewer financing rounds being completed than in previous years. Many emerging biotechnology companies continue to face capital constraints, leading some to reduce office and laboratory footprints, place excess space on the sublease market, or seek early lease terminations.
Demand remains well below the levels experienced during the industry’s rapid expansion earlier this decade, and growing reliance on China-based research partnerships could also temper future space requirements in Greater Boston.
Strong Public Markets Offer Encouragement
One bright spot for the industry has been the improving performance of biotechnology companies in the public markets.
Over the past year, the S&P Biotechnology Select Industry Index has climbed more than 80%, creating a more favorable environment for initial public offerings.
At the current pace, 2026 is on track to become the strongest year for biotech IPOs since 2021.
Seven Boston-area life sciences companies have already completed public offerings this year, collectively raising approximately $3 billion. Among the most notable was Cambridge-based Parabilis Medicines—formerly Fog Pharma—which completed one of the largest biotechnology IPOs in recent years.
Labor Market Remains a Concern
While the life sciences sector is showing signs of stabilization, Boston’s broader economy continues to present challenges.
According to U.S. Bureau of Labor Statistics data cited in the report, the metropolitan area lost approximately 12,000 jobs over the past year, a decline of 0.4%. Employment has been particularly soft in education, healthcare, and professional services—the region’s largest employment sectors.
Colliers also notes that international migration into Greater Boston has fallen to its lowest level since the height of the COVID-19 pandemic, a trend that could affect long-term workforce growth in one of the nation’s leading innovation hubs.
A Market Beginning to Rebalance
Although Boston continues to have the country’s highest concentration of available life sciences space, Colliers believes the market is entering a new phase.
The speculative construction boom is largely behind it, vacancy growth is slowing, leasing activity is improving, and capital markets are showing renewed strength. At the same time, tenants continue to benefit from favorable lease economics, abundant choices, and generous concession packages.
For now, the balance of power remains firmly with tenants. But with construction activity moderating and demand beginning to recover, Boston’s life sciences market appears to be laying the groundwork for a more balanced environment in the years ahead.
