Aaron Jodka
Jeffrey Myers
• The life sciences market is showing signs of stabilization, with indicators pointing toward a future recovery.
• Supply-side pressure is waning, and unlike in 2023, when all major markets posted rising vacancies, that trend did not continue in 2024.
• Venture capital funding in 2024 was the fourth strongest on record.
• Although job growth picked up last year, widespread layoffs and company closures resulted in negative net absorption.
• The outlook for the industry is strong, driven by continued investment in pharmaceutical research and the development of new treatments.
The life sciences market showed signs of recovery in 2024. Despite negative net absorption in aggregate across the major markets—driven by the San Francisco Bay Area, New Jersey, Denver/Boulder, Boston, and Philadelphia—supply-side pressure is beginning to ease. The rapid addition of millions of square feet of space has arguably been the most significant factor in softening fundamentals. Vacancies are roughly three times higher than in 2021, with new supply topping 43 million SF from 2022-2024. The two largest markets—Boston and the San Francisco Bay Area—each saw vacancy rates rise by 10 percentage points.
At the same time, uncertainty is weighing on the industry. Leaders of numerous industry advocacy organizations and research institutions have expressed concern that new policies emerging from Washington, D.C., could hinder life sciences growth. These changes bear watching, as the life sciences industry relies heavily on research grants from the National Institutes of Health (NIH).
The outlook for the industry remains strong, with thousands of therapies under investigation across all stages of development. Venture capital funding posted the fourth-highest total on record, topped only by the market peak from 2020–2022. Pharmaceutical spending also continues at a healthy pace. Meanwhile, IPO activity has regained traction, and job growth has resumed after a brief lull. Together, these are promising signs of future expansion for the sector and investment opportunities.
For a deeper dive into the trends shaping the life sciences industry, access the Colliers 2025 Life Sciences Report here.
