### Life Sciences, Funding, and Real Estate: The 2025 Outlook
The life sciences sector faced significant challenges in 2024, including geopolitical conflicts, a sluggish economy, and persistently high interest rates. However, global venture capital investment and mergers and acquisitions increased, U.S. employment in the sector grew to record levels, and the industry remained in a period of unprecedented innovation and discovery, according to CBRE’s “U.S. Life Sciences Outlook 2025” report.
Looking ahead to 2025, both CBRE and Cushman & Wakefield anticipate continued investment in the sector, with signs of a potential commercial real estate (CRE) recovery, according to Cushman & Wakefield’s “Life Sciences Funding in View: 2025 Outlook” report.
### Continued Funding Growth
Both CBRE and Cushman & Wakefield predict that the flow of venture capital and other investments into life sciences, which gained momentum in 2024, will persist into 2025. Analysts from Cushman & Wakefield attribute this trend to investor enthusiasm for ongoing innovation, with economic strength driving capital into the sector over the past year—a trend likely to continue.
CBRE analysts highlight that sustained economic resilience in the U.S. should support revenue growth for life sciences companies. Other factors contributing to the sector’s strength include improving capital markets, record employment, rising demand for lab and research and development (R&D) space, and ongoing innovation in pharmaceuticals, cell and gene therapy, and clinical trials.
### Impact on Real Estate
Life sciences lab and R&D property sales dropped to their lowest level in more than a decade in 2024, primarily due to high interest rates and weak supply-and-demand fundamentals, according to CBRE. However, improving macroeconomic conditions, increased demand, and lower interest rates could lead to greater investment sales activity in 2025. Still, analysts caution that a surge in new supply during the first half of the year may present a challenge.
Cushman & Wakefield echoes the sentiment that real estate transactions should increase in 2025, signaling the start of a CRE recovery. While CBRE notes a rise in new lab space deliveries, Cushman & Wakefield analysts highlight a recent slowdown in construction activity, allowing the sector some time to balance supply and demand. Additionally, leasing activity is expected to pick up, leading to higher space absorption.
“Well-capitalized companies are better positioned to make longer-term decisions, including increasing headcount and expanding their footprint,” Cushman & Wakefield analysts added.
As the industry moves into 2025, continued investment in life sciences, coupled with improving real estate conditions, suggests that the sector is poised for growth despite ongoing challenges.
About the Publisher:
Steve Griffin is based in sunny Palm Harbor, Florida. He’s an accountant by profession and the owner of GRIFFIN Tax (www.griffintax.com) and REVVED Up Accounting (www.revvedupaccounting.com). In addition, Steve founded Madison Avenue Technology (www.madisonave.tech). With a strong passion for commercial real estate, he’s also dedicated to keeping you up to date with the latest industry news.
