Chapter 9
Life Sciences
U.S. Real Estate Market Outlook Midyear Review 2026
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2 Minute Read
Midyear Outlook
- The life sciences lab/R&D market is poised to benefit from strengthening demand drivers in 2026, helping to lower the overall vacancy rate. Job growth in the biotechnology R&D industry surged to its strongest pace in nearly three years in April and more life sciences IPOs have been made year-to-date in four years.
- Net absorption is forecast to increase in H2 2026, but will remain insufficient to materially reduce vacancy from historically high levels.
- 2026 completions of lab/R&D space will be the lowest in 10 years (3 million sq. ft.), helping stabilize the balance of supply and demand. Since mid-2023, lab/R&D construction activity has declined by 88% to 4.7 million sq. ft. currently, the lowest total since 2017.
- Average lab/R&D asking rents will continue to decline in 2026 as occupiers have an abundance of available space options.
Figure 12: Rent & Vacancy for Life Sciences Lab/R&D Buildings
Key Updates to Forecast
- Demand for life sciences lab/R&D space is expected to lower the overall vacancy rate by 40 bps to 22.5%. This improvement will be driven by a more robust labor market and capital markets environment.
- Net absorption is expected to accelerate in H2 and make the annual total strongly positive for the first time in three years.
- Average lab/R&D asking rent will decline more rapidly than our original forecast, based on weaker demand in the first half of the year.
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Life Sciences
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