The Boston commercial real estate market encountered difficulties in 2023 due to increasing interest rates, a sluggish IPO market, supply expansions, and investor hesitancy. According to the 2023 Year-End Boston Life Science Report by Hunneman, over 70 companies in Massachusetts experienced layoffs. Submarkets such as Cambridge, Boston, Somerville and surrounding suburbs saw a rise in vacancies. In fact,Cambridge alone has approximately 1.5 million square feet of sublease space available while Somerville is facing an oversupply with double the amount of construction compared to existing inventory.
Despite these challenges,the industry still saw significant lease signings including Alexion Pharmaceuticals in Cambridge and Novo Nordisk in Waltham.Additionally,in light of similar obstacles expected for 2024,the life science sector remains optimistic about its future growth potential.The U.S.Department of Health and Human Services launched ARPANET-H with Massachusetts serving as host for the “Investor Catalyst Hub” aimed at supporting companies.Incubators and startups continue to thrive,supporting new discoveriesand innovative solutions within this industry.
This article was originally published on Connect CRE’s website under the title “Challenging Headwinds for Boston Life Science Industry”.
