{"id":1004761505,"date":"2025-06-13T04:24:13","date_gmt":"2025-06-13T12:24:13","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004761505"},"modified":"2025-06-23T04:37:40","modified_gmt":"2025-06-23T12:37:40","slug":"key-trends-shaping-the-life-science-sector","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/key-trends-shaping-the-life-science-sector\/","title":{"rendered":"6 Key Trends Shaping the Life Science Sector"},"content":{"rendered":"\n

Calling the life science sector\u2019s start to this year \u201cdisquieting,\u201d a just-released report from JLL examines the multiple uncertainties that are making investors and pharma companies cautious and leasing deals smaller on average.<\/p>\n\n\n\n

One measure of this is that the U.S. lab market, which totals roughly 200 million square feet, would need about 20 million to 25 million in net absorption or supply reduction to reach equilibrium, according to JLL\u2019s latest study.<\/p>\n\n\n\n

\u201cBarring an unforeseen and substantial growth spurt of demand,\u201d JLL writes, \u201cthe likeliest outcome of this period of oversupply is that well-built and well-located buildings will gain market share, while buildings without those aspects will face increased odds of distress in the next 12-24 months.\u201d<\/p>\n\n\n\n

\n\n\n\n

READ ALSO<\/strong>: Life Science Development\u2019s Guarded Prognosis<\/a><\/p>\n\n\n\n

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The long game will be crucial here, the report predicts. Although \u201cbuilding owners cannot wait in perpetuity for markets to recover,\u201d landlords with the requisite experience and scale\u2014and submarkets that are well established\u2014are currently out-leasing their competitors and should do well when the next recovery phase in the biopharma sector inevitably starts.<\/p>\n\n\n\n

Looking past the big picture, JLL dives into six key trends.<\/p>\n\n\n\n

A drop in lab leasing volume<\/h2>\n\n\n\n

After growing throughout 2024, lab leasing decreased significantly in the first quarter.<\/p>\n\n\n\n

This volume is notably slower so far this year versus 2024, and that caution is reflected in part by a larger percentage of smaller deals.<\/p>\n\n\n\n

\u201cThe reductions in tenant demand in early 2025 across the U.S. suggest muted leasing volume growth for the rest of the year,\u201d JLL predicts.<\/p>\n\n\n\n

\"Chart<\/a>
Lab leasing activity. Chart courtesy of JLL Research\u2014Bay Area, Boston, Boulder, Greater DC, New Jersey, Philadelphia, Raleigh-Durham, San Diego, Seattle, Los Angeles, Houston<\/em><\/figcaption><\/figure>\n\n\n\n

A mixed performance across regions<\/h2>\n\n\n\n

The downward pressure on rents is most apparent in markets with the most supply.<\/p>\n\n\n\n

Traditional powerhouses metro Boston, the Bay Area and San Diego are seeing similar market conditions of \u201cprolonged oversupply and weak demand,\u201d JLL reported. \u201cAvailability rates have remained elevated, leading to significant downward pressure on rents.\u201d<\/p>\n\n\n\n

In contrast, some mid-sized markets, including metro Washington, D.C.; New Jersey and Raleigh-Durham, N.C., are in a more stable position<\/a>, with \u201cdecent availability levels and relatively moderate rent changes.\u201d<\/p>\n\n\n\n

\"Chart<\/a>
Rent change vs. total availability; Average asking rents compared to peak of last cycle. Charts courtesy of JLL Research<\/em><\/figcaption><\/figure>\n\n\n\n

A shrinking inventory<\/h2>\n\n\n\n

The lab market is already shrinking, \u201cwith much more to go.\u201d The shrinking inventory is evidenced by JLL having identified a reduction in lab space over the past 12 months of about 1.2 million square feet across roughly a dozen buildings nationwide, as owners of buildings with elevated vacancy levels seek other uses.<\/p>\n\n\n\n

\"Chart<\/a>
The lab market is shrinking. Chart courtesy of JLL Research\u2014Bay Area, Boston, Boulder, Colo., Greater D.C., New Jersey, Philadelphia, Raleigh-Durham, N.C., San Diego, Seattle, Los Angeles, Houston<\/em><\/figcaption><\/figure>\n\n\n\n

A shift to reshore biomanufacturing<\/h2>\n\n\n\n

Federal policy shifts since the pandemic have begun to reshore biomanufacturing.<\/p>\n\n\n\n

The report states that \u201c15 major pharmaceutical companies year-to-date have announced more $270 billion in U.S. biomanufacturing and R&D investments planned over the next five to 10 years, driven by the threat of additional pharmaceutical tariffs and other cost pressures.\u201d<\/p>\n\n\n\n

Although some of those investments will be on pharma companies\u2019 own campuses, JLL found a spike in interest in built biomanufacturing space in key U.S. markets.<\/p>\n\n\n\n

\"Chart<\/a>
Post-pandemic federal policy shifts have begun to reshore biomanufacturing. Chart courtesy of JLL Research<\/em><\/figcaption><\/figure>\n\n\n\n

A change in deal composition<\/h2>\n\n\n\n

The make-up of lab deals across the country has changed dramatically.<\/p>\n\n\n\n

Nationwide, deals for lab space have changed \u201cdramatically,\u201d according to JLL. Direct relocations are down sharply, and renewals\u2014especially for shorter terms (less than seven years)\u2014are more popular, as are subleases.<\/p>\n\n\n\n

\"Chart<\/a>
The composition of lab deals across the U.S. Chart courtesy of JLL Research\u2014Bay Area, Boston, Boulder, Greater DC, New Jersey, Philadelphia, Raleigh-Durham, San Diego, Seattle, Trailing 12-months<\/em><\/figcaption><\/figure>\n\n\n\n

A focus on the best buildings, best locations<\/h2>\n\n\n\n

More than ever, tenants want to be in the best buildings or the best submarkets.<\/p>\n\n\n\n

The two most in-demand segments of the lab market are newer, purpose-built properties in the largest markets (metro Boston, the Bay Area and San Diego) and, for companies relocating across the U.S., long-established submarkets.<\/p>\n\n\n\n

It might sound too basic, the report noted<\/a>, but \u201cbuilding quality and location matter more than ever.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

And what\u2019s behind these shifts, according to JLL\u2019s latest research. <\/p>\n","protected":false},"author":882,"featured_media":1004761518,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21784,21782,21808,23891,21742,21747,51037],"tags":[32796],"class_list":["post-1004761505","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-brokerage","category-development","category-featured","category-national","category-latest","category-office","category-trends","tag-jll"],"acf":[],"yoast_head":"\n6 Key Trends Shaping the Life Science Sector - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"JLL examines the multiple uncertainties that are making life science investors and pharma companies cautious and leasing deals smaller.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/key-trends-shaping-the-life-science-sector\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"6 Key Trends Shaping the Life Science Sector\" \/>\n<meta property=\"og:description\" content=\"JLL examines the multiple uncertainties that are making life science investors and pharma companies cautious and leasing deals smaller.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/key-trends-shaping-the-life-science-sector\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-13T12:24:13+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-06-23T12:37:40+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/06\/Lab-leasing-activity-JLL.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"600\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Scott Baltic\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/key-trends-shaping-the-life-science-sector\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/key-trends-shaping-the-life-science-sector\/\",\"name\":\"6 Key Trends Shaping the Life Science Sector - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/key-trends-shaping-the-life-science-sector\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/key-trends-shaping-the-life-science-sector\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/06\/Lab-leasing-activity-JLL.jpg\",\"datePublished\":\"2025-06-13T12:24:13+00:00\",\"dateModified\":\"2025-06-23T12:37:40+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/61ac1450f3ffaa0e850b834c28526555\"},\"description\":\"JLL examines the multiple uncertainties that are making life science investors and pharma companies cautious and leasing deals smaller.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/key-trends-shaping-the-life-science-sector\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/key-trends-shaping-the-life-science-sector\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/key-trends-shaping-the-life-science-sector\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/06\/Lab-leasing-activity-JLL.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/06\/Lab-leasing-activity-JLL.jpg\",\"width\":800,\"height\":600,\"caption\":\"Lab leasing activity. 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