National vacancy rate declines for first time in four years as leasing activity strengthens and new construction continues to slow
NEW YORK – Cushman & Wakefield (NYSE: CWK), a leading global commercial real estate services firm, today released its Q3 2026 U.S. Life Sciences MarketBeat report, showing early signs of recovery across the U.S. life sciences real estate sector as vacancy declined for the first time in four years and leasing activity accelerated during the third quarter.
The national life sciences vacancy rate fell to 23.9%, a 20-basis-point decline from the previous quarter and the first quarterly decrease since vacancy began rising earlier in the cycle. Net absorption turned positive during the quarter, totaling nearly 500,000 square feet, while leasing activity increased 11% quarter-over-quarter (QOQ) to 2.9 million square feet (msf).
“The market is starting to move in a healthier direction after an extended period of adjustment,” said Sandy Romero, Head of Office and Alternative Insights at Cushman & Wakefield. “Companies are still being selective and deliberate in their real estate decisions, but we're seeing more activity from tenants that have postponed expansion plans or spent the last few years reassessing space needs. At the same time, the development pipeline has come down significantly. Those shifts are beginning to create a healthier balance between supply and demand in many markets.”
Construction activity continued to contract during the quarter, with 5.2 msf under construction nationally, down 40% from a year ago. Build-to-suit projects accounted for 73% of all active development, reflecting a continued focus on highly targeted projects supported by committed occupier demand.
Average asking rents declined 5.6% year-over-year (YOY) to $62.85 per square foot nationally, though performance varied across markets. Los Angeles-Orange County and Philadelphia both recorded annual rent growth during the quarter.
Capital markets activity also gained momentum. Research and development property sales totaled $3.0 billion during Q3, a 50% increase from a year earlier, while average pricing increased 13% YOY. The report found that opportunistic acquisitions were a key driver of transaction volume, as investors pursued assets that have repriced.
Life sciences capital formation remained active as well. Venture capital funding reached $7.9 billion during the quarter, with year-to-date investment up 6% compared to the same period last year. IPO volume reached $7.3 billion through the first three quarters of 2026, nearly four times the total recorded during the same period in 2025.
Click here to download the Q3 2026 U.S. Life Sciences MarketBeat.
