The life sciences industry faced numerous challenges in 2024, such as political conflicts, a slow economy and high interest rates. Despite these obstacles, there were also positive developments including an increase in global venture capital and mergers and acquisitions. The United States saw record employment growth in the sector and it continues to experience unprecedented innovation.
Looking ahead to 2025, both CBRE’s “U.S. Life Sciences Outlook” report and Cushman & Wakefield’s “Life Sciences Funding in View: 2025 Outlook” predict that funding will continue flowing into the sector with a potential recovery for commercial real estate.
Funding Continues
According to analysts at Cushman & Wakefield and CBRE, venture capital investments into the life sciences industry that began in 2024 are expected to persist through 2025. This is due to investor enthusiasm for ongoing advancements within the sector as well as continued economic strength driving capital towards it.
CBRE also notes that strong economic conditions will likely contribute positively towards revenue growth within this field while other factors like improved access to capital markets have led companies hiring more employees than ever before across various industries including pharmaceuticals , cell/gene therapy research , clinical trials .
Real Estate Impact
In contrast with previous years where sales of lab/R&D properties hit their lowest levels since over ten years ago due largely because of higher interest rates coupled by weak supply-and-demand fundamentals; however now thanks partly thanks partially lower borrowing costs along side better macroeconomic trends could lead toward increased investment sales during this upcoming year despite some headwinds caused by new construction projects being completed during H1-25 according too experts from CBRE who pointed out how deliveries surged back up again after having been down significantly last year when compared against prior periods which had seen much higher volumes sold off all around country except maybe here locally where they remained relatively stable throughout same time frame period even though we did see some uptick recently following announcement made earlier this month about how more than 1 million square feet worth of new lab/R&D space would be coming online soon.
Cushman & Wakefield also agrees with the assessment that deals should increase in the next year, stating that improved activity within life sciences will signal a potential start to a commercial real estate recovery. Additionally, they note that there has been a decrease in construction projects which gives the industry some breathing room while leasing activity is expected to pick up and absorb new space. Analysts at Cushman & Wakefield add that well-funded companies are better positioned to make long-term decisions like expanding their workforce and increasing their physical footprint.
