Cushman & Wakefield Releases February 2026 Life Sciences Update
NEW YORK, February 25, 2026 – The U.S. life sciences real estate sector is entering a more measured phase of growth as vacancy holds steady, new construction slows, and capital markets activity regains momentum, according to the latest Life Sciences Update from Cushman & Wakefield.
U.S. life sciences asking rents averaged $66.16 per square foot (psf) in the fourth quarter of 2025, down 3.1% year-over-year (YOY). Despite modest softening, rents continue to command a substantial premium over traditional office space, averaging 40% higher across the 12 markets tracked by Cushman & Wakefield Research. In key hubs such as San Diego and Boston, the premium reaches 68% and 61%, respectively.
At the same time, vacancy levels held steady in the second half of 2025. The overall U.S. life sciences vacancy rate was 23.1% in Q4 2025, 320 basis points above year-ago levels. Direct vacancy edged down to 19.9% quarter-over-quarter (QOQ), while sublease vacancy remained unchanged at 3.5% both QOQ and YOY.
“After several years of rapid expansion, the sector is recalibrating,” said Sandy Romero, Head of Office and Alternative Insights at Cushman & Wakefield. “With development activity now sharply reduced, the sector has the runway it needs to absorb recent deliveries and stabilize fundamentals.”
The construction pipeline has contracted sharply from its 2023 peak, when activity represented 17% of existing inventory, to just 3% as of Q4 2025. Just under 8 million square feet (msf) is currently underway, the lowest level since 2019 with more than half of that pipeline preleased.
Nearly 6 msf is expected to deliver by the end of 2026, 63% of which is preleased, reflecting a broader shift away from speculative development toward build-to-suit (BTS) projects. In 2025, BTS accounted for nearly one-fourth of total deliveries.
“The reset in development activity is one of the most significant shifts we’ve seen in this cycle,” added Romero. “A greater share of preleased and build-to-suit projects reduces speculative risk and supports more sustainable long-term growth.”
Markets with more constrained development, including Los Angeles–Orange County, Philadelphia, suburban Maryland, New Jersey and Denver, have maintained vacancy rates below 20%, avoiding the large blocks of newly delivered vacant space seen elsewhere.
From an investment perspective, capital markets activity strengthened in 2025. U.S. R&D sales volume totaled $9.8 billion, up 29% YOY. Fourth quarter volume reached $3.4 billion, up 51% QOQ and 36% YOY, signaling growing investor confidence.
The number of sales transactions over the trailing four quarters rose 38% YOY to 264 deals, slightly above the 10-year average, while average deal size increased to $37 million.
“The rebound in transaction activity, particularly in the fourth quarter, reflects improving investor confidence in life sciences real estate,” added Romero. “As pricing continues to recalibrate and capital markets conditions improve, investors remain focused on well-located, high-quality assets.”
Transaction volume remained concentrated in the top five metros, accounting for more than 80% of 2025 activity. San Francisco led nationally, followed by Boston; while New York, the Southeast and San Diego posted notable YOY gains.
With construction slowing, vacancy holding steady, and investment activity rising, the life sciences real estate market is poised for gradual rebalancing in 2026.