BOSTON— The Greater Boston life sciences real estate market is facing its most turbulent period in recent memory, as record-high vacancies, cooling venture capital funding, and mounting macroeconomic pressures reshape the biotech landscape.
According to the latest Q2 2025 report from Colliers, total available lab and life sciences space across the metro now stands at a record 17 million square feet, driven in large part by newly delivered — but entirely vacant — buildings.
With 643,000 SF of new product hitting the market without a single lease in place, direct availability reached 13.4M SF, and when sublease space is factored in, the overall availability rate has surged to 29.7% — an 8.6 percentage point increase from one year ago.
The market has entered a stage where speculative construction has collided headfirst with a demand cliff. The result is a bloated inventory with few immediate takers.
VC Freeze and Economic Uncertainty Stifle Demand
The biotech funding environment is contributing significantly to the slowdown. In the first half of 2025, only $3.3 billion in venture capital flowed into Boston-based biotech firms — the slowest two-quarter stretch since the pandemic-era boom began. Company valuations have plunged, IPO activity has slowed to a crawl (just one this year so far: Sionna Therapeutics), and investor appetite has diminished, driven by poor returns and market volatility.
The S&P Biotech Index is down 50% from its 2021 peak, while broader concerns about Federal policy — including potential cuts to NIH funding and staffing reductions at the FDA — have further chilled sentiment. MassBio, in its Q2 report, raised alarm bells over the long-term implications for the sector.
Tenants, especially early-stage firms, are shrinking their real estate footprints. Where biotech companies once sought up to 8M SF in 2021, today they’re in the market for just 2.8M SF — a nearly two-thirds reduction in active demand.
Boston Proper: Big Supply, Bigger Vacancies
No part of the metro has felt the imbalance more acutely than the city of Boston. Since 2019, the city has added 6.7M SF of new life sciences inventory — more than double its pre-COVID footprint — but over 4M SF of that space remains vacant.
Entirely empty buildings, such as 305 Western Avenue, 601 Congress Street, and 2 Harbor Street, highlight the challenges. The city’s life sciences availability rate now exceeds 38%, with over half of the 2M SF scheduled to deliver in the next two years still lacking tenants.
Some neighborhoods have struggled to gain momentum. Despite robust growth in the Seaport, which now hosts 2.5 times more lab space than in 2020, Downtown and Allston/Brighton have seen little to no net absorption over the same period.
Cambridge: Still the Hub, but Feeling the Strain
Cambridge has fared better thanks to a more conservative development pipeline. The city’s availability rate held steady at 22.9%, up only modestly from last year. Asking rents, however, are trending downward, falling 6% over the past year, and a record 2.7M SF sits vacant in East Cambridge.
Still, leasing activity has been more encouraging. Notable deals include Biogen’s 580,000 SF lease at 75 Broadway, and Intellia Therapeutics’ 101,000 SF at 400 Technology Square, with expansion rights. VC activity is also showing signs of revival here, with firms like ARTBIO ($132M) and Merida Biosciences ($121M) helping make Q1 the strongest quarter for Cambridge-based funding since early 2022.
Suburbs: Distress Rising, Transactions Beginning
The suburbs tell a more cautionary tale. Despite 6.4M SF of lab space delivered since 2023, 30.5% of suburban inventory is now available. Five consecutive quarters of negative absorption have hampered the region, and some developers have already begun to abandon speculative projects.
Notably, distressed assets are starting to transact, often at steep discounts:
- Northeastern University purchased the Burlington BioCenter for $301/SF, down 68% from its 2022 price.
- Stony Brook Office Park in Waltham sold for $94/SF in a June short sale, also 68% below its last sale.
- A 272,000 SF property in Wellesley was sold at auction in July.
Economic Crosswinds Complicate the Outlook
While the broader U.S. economy remains technically healthy — with a 4.1% unemployment rate and slow but steady job growth — Fed Chair Jerome Powell noted that rising tariffs and delayed rate cuts are increasing economic uncertainty. Inflation projections are being revised upward, and consumer sentiment is hovering near historic lows.
Boston’s job market is underperforming relative to peer cities. Year-over-year job growth sits at just 0.2%, well behind national trends and metro competitors like San Francisco, New York, and Philadelphia. Local institutions, including Harvard, Boston University, and the State of Massachusetts Executive Branch, have implemented hiring freezes and layoffs tied to shrinking federal support.
What’s Next?
With more than 3 million SF still under construction — and nearly 40% of it unleased — the Boston life sciences market appears poised for further softening before any meaningful rebound. Analysts expect vacancies to continue climbing into 2026, with the most vulnerable assets located in Boston proper and the surrounding suburbs.
In the near term, tenants may have the upper hand, with falling rents and rising concessions. But for landlords and developers, particularly those holding empty or distressed buildings, the path to stabilization may be long and uncertain.
To read the full Colliers report, please click here.
