Bay Area Life Science Space Demand Returns to Pre-Pandemic Levels

Life science real estate vacancies in the Bay Area rose to 8.2% in the first quarter of 2023 from 6.1% in Q4, according to Transwestern’s George Entis report. Normalized demand for lab space, combined with an increasing development pipeline, pushed vacancies back up to pre-pandemic levels.
Q1 leasing activity was subdued as the four-quarter total reached 1.6 million square feet – a 55.4% decrease compared to the same period last year – and rent growth moderated significantly from its previous “blistering pace,” declining 28.9% year-over-year and settling at $4 per square foot on average .
Biotechnology advancements have kept venture capital funding high for Bay Area life sciences industry; $1 billion was invested during Q1 alone which is comparable with pre-pandemic numbers reported by Entis .