Lab space net absorption: Influx of new development drives flight to quality

Lab net absorption since COVID-19 onset (m.s.f.)

Source: JLL Research; Boston, San Diego, Bay Area, Philadelphia, Greater DC, Seattle, Raleigh-Durham

The pace of life sciences innovation remains strong despite macroeconomic challenges, and recent research shows positive trends as tenants seek high-quality lab space. Similar to the office market, net absorption across lab space has been extremely strong in assets delivered since 2015. 34.9 million square feet of space has been spoken for in buildings that came online 2020-2022 as tenants exhibited demand for high-quality lab spaces.

An influx of new development in the past few years has driven this flight to quality trend. With an increase of high-quality supply available, tenants are prioritizing purpose-built, well amenitized space in the best possible locations. Tenants are also willing to pay a premium for this space, as quality is extremely important for efficient processes within the life sciences industry.

Over the next few years, new development space will continue to be highly competitive. In Boston, the “best product” of the future supply in the pipeline the has a 5:1 ratio of preleasing/commitment volume compared to everything else.

To learn more about key findings in our life sciences research, download our 2022 Life Sciences Research Outlook.