Life science operators in the Greater Boston area just can't catch a break and things aren't expected to get better any time soon. The market generated a total availability rate of 26.9 percent in 2024, according to a report from Colliers. Not only has that amount continued to increase with each passing quarter but it's one of the highest levels in the nation in the life sciences sector, said the CRE firm.
The Seaport and Allston/Brighton have the highest vacancy rates in the metro, at 65.3 percent and 38.4 percent, respectively. This includes Allston/Brighton's recently delivered 250 Western Avenue and 60 Guest Street buildings, which take up 272,000 square feet and 355,000 square feet, respectively. Also, in Seaport, Ginkgo Bioworks launched its new 19 Fid Kennedy asset on the market, which takes up 262,000 square feet. In total, more than 15 million square feet of space is available on the market to rent in Boston's life sciences space. Also, 2024 marked the first time that absorption hit negative territory in over a decade.
"Rising vacancies stem from negative net absorption and new, unfilled speculative space spread across numerous Suburban communities," Colliers wrote.
"About 7.7 million SF is available in record amounts in both the lab and GMP segments of the market, and 80% is directly offered by landlords."
Also, Colliers points to some industry challenges. Weaker valuations are leading to less initial public offerings and have impacted venture capital. In fact, venture capital flows in 2024 dipped for the third straight year. But that's not all, there is concern about policies from both the new administration and Congress and the negative weight they could put on Boston's life science sector.
"Given the relatively weak demand environment and the four million SF-plus still under construction, vacancies are poised to increase in upcoming months," Colliers warned.
While the CRE firm added that it could take "years" for the market to hit equilibrium, Boston might still have big long-term upside thanks to its "strong life sciences ecosystem [that] will generate demand."