For the data behind the commentary, download the full Q2 2025 U.S. Life Sciences Report.
Q2 2025 Life Sciences Key Trends
- Demand has softened as occupiers adjust space needs amid economic uncertainty. Net absorption remained negative through the first half of 2025 at -1.2 million square feet (msf), an improvement from the -2.8 msf in the first half of 2024, suggesting that the market may be moving toward firmer footing. Overall asking rents fell 3.3% year-over-year (YOY) to $67.88 per square foot (psf), while overall vacancy rose 520 basis points (bps) YOY to 23.9%.
- Meanwhile, completions added 6.4 msf in the first half of 2025, down 2% YOY. Some relief is likely in sight as the construction pipeline contracts, slowing the addition of new vacant space.
- The current construction pipeline of 7.7 msf is about half the size it was in 2024. Construction has shifted from overwhelmingly speculative (spec) projects in 2023 to a more balanced build-to-suit (BTS) pipeline. As of Q2, spec construction accounted for 45% of construction, with BTS at 55%. This reduced spec activity will give the market breathing room and help absorb existing vacant space in the next few quarters.
- Investment sales activity hit $1.9 billion in Q2, down 19% QOQ but 159% higher than Q2 2024. Deal volume through the first half of 2025 rose 64% YOY.
- Venture capital (VC) funding for life sciences declined further in Q2, totaling $5.2 billion. For the first half of 2025, VC funding was down 21% YOY, with 33% fewer deals. Reduced capital availability will continue to strain tenant balance sheets, potentially slowing space expansion decisions.
For the data behind the commentary, download the full Q2 2025 U.S. Life Sciences Report.
