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Boston-Cambridge Life Sciences Market Sees 770 BPS Spike in Vacancy

It may not be the best time to be a landlord in Boston-Cambridge's life sciences sector. A fourth quarter and full year 2024 report from Savills analyzing the performance of the asset class and the market found that overall vacancy skyrocketed 770 basis points last year to 19.8 percent. It's unclear if that level is an all-time high in the area — but that amount is substantially higher than any percentage that Savills listed on its chart, which dates back to 2019.

Availability went from 9.9 million square feet of space in 2023 to 13.1 million square feet at the end of 2024. Savills said that these are a result of "market stagnation."

"As life sciences companies increasingly collaborate with tech and AI, companies are prioritizing adaptable, collaborative spaces that foster innovation over traditional labs, reflecting a need for flexibility in a rapidly changing landscape," Savills wrote in its report.

Venture capital funding dropped from $2.3 billion in the fourth quarter of 2023 to $2.3 billion a year later. Also, NIH funding was $3.1 billion compared with $3.2 billion 12 months ago.

Meanwhile, construction went down to 5.6 million square feet in the fourth quarter compared with 7.7 million in the same period a year ago. This happened as a result of "subdued demand and leasing challenges," according to Savills.

The two largest leases in Boston-Cambridge's life science market went to Korro Bio and Ultragenyx Pharmaceuticals, which secured 50,000 square feet and 40,100 square feet of space, respectively. They were followed by Verastem Inc. and Flare Therapeutics, which took 27,800 and 21,600 square feet of space, respectively.

Reprinted with permission from the Monday, 27 January 2025 05:56:00 EST online edition of GlobeSt © 2025 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or reprints@alm.com.