Boston — After more than a year of sluggish demand and an oversupplied market, Boston’s life sciences real estate sector is showing early signs of stabilization and renewed optimism, according to JLL’s Q2 2025 Lab Market Outlook, released this week.
While it remains a tenant-favored market—with rental rates still declining and some properties transitioning to lender-driven sales—key indicators suggest that the sector may be entering a long-awaited reset phase.
Momentum Building After Slowdown
In a notable turnaround, total lab demand surged to 2.05 million square feet in the second quarter, nearly doubling from 1.06 million square feet in Q1 and reaching the highest level since 2022. At the same time, leasing activity more than doubled, with 19 leases totaling approximately 593,000 square feet signed in Q2.
Meanwhile, the overall lab inventory shrank for the second straight quarter. Roughly 600,000 square feet of previously designated lab space exited the market, either entering the sales pipeline or being repurposed for alternative uses. This selective tightening of supply could signal a slow but steady rebalancing of the market.
Rents Continue to Slide, But Pre-Leasing Rebounds
Lab rental rates fell another 2.1% quarter-over-quarter and are now 16% below their market peak, maintaining the upper hand for tenants in lease negotiations. However, early signs of landlord confidence are emerging, especially in new, high-quality construction.
Notably, 73% of lab space currently under construction is now pre-leased, indicating strong interest from tenants in modern, well-located projects that offer operational efficiency and long-term value.
Looking Ahead to the Second Half of 2025
Although Boston’s lab real estate market continues to recalibrate, the latest data points to a potentially more active and balanced second half of the year. As companies regain confidence and funding begins to trickle back into the biotech and life sciences ecosystem, experts say the groundwork for recovery may already be in place.
“This quarter’s spike in leasing activity and record-high demand suggest that tenants are reengaging with the market, even as they remain cost-conscious,” JLL researchers noted. “Combined with the pullback in inventory, these trends mark an important inflection point for Greater Boston’s life sciences sector.”
