New third-quarter reporting from three major brokerages points to a life sciences real estate sector that is stabilizing in some respects while remaining under pressure in others. CBRE, Cushman & Wakefield, and Newmark each cite healthier demand and a thinning construction pipeline, but they diverge on current levels of lab vacancy and the durability of any recovery.
Cushman & Wakefield reports that U.S. lab vacancy declined by 20 basis points from the second quarter to 23.9%, the first quarterly drop in four years. The firm indicates that vacancy has likely peaked, even as it acknowledges near-term volatility. CBRE similarly tracks a 10-basis-point decline to 23.4%, its second consecutive quarterly decrease since late 2022, though the rate remains 60 basis points higher than a year earlier.
Newmark takes a more cautious view, citing an all-markets vacancy rate of 27%, up from 26.5% in the prior quarter. According to Newmark, most tracked markets registered higher vacancy, underscoring how conditions vary across geographies. Each firm relies on different inventories and market definitions, which contributes to the discrepancy, but collectively the data suggest a fragile and uneven recovery.
On the demand side, CBRE records 569,257 square feet of positive net absorption in Q3 after two quarters of negative readings. Cushman & Wakefield reports roughly 484,000 square feet of net absorption. Leasing activity also improved: CBRE measures 2.7 million square feet of completed leases, a 12.7% increase year over year, while cautioning that this pace is insufficient to quickly absorb existing availability. Cushman & Wakefield reports an 11% leasing gain compared with the second quarter.
Regionally, Newmark notes that active tenant requirements in Boston, the San Francisco Bay Area, San Diego, and Seattle are up 62.6% from their second-quarter 2025 lows. The Bay Area stands out with about 484,000 square feet of positive net absorption year to date, aided by AI-related users. In contrast, Denver-Boulder, Philadelphia, and San Diego are still losing occupancy. Newmark highlights growing lab demand from companies in AI, quantum science, robotics, and other “tough tech” sectors.
All three firms report a pullback in speculative supply. Cushman & Wakefield estimates roughly 5.2 million square feet of lab space under construction, down 40% year over year, with about 73% of that pipeline delivered as build-to-suit. CBRE states that 3 million square feet has been completed over the past year, the lowest annual total since 2017. Newmark counts approximately 2 million square feet under construction across its four core markets, most of which is already committed.
Rents continue to adjust downward. Cushman & Wakefield pegs the national average at $62.85 per square foot, a 5.6% annual decline. CBRE reports a 7.2% year-over-year drop in asking rents, bringing them to their lowest point since mid-2023. Newmark finds that only two of the 13 markets it tracks are posting positive rent growth, indicating that landlord concessions and pricing pressure remain common.
Capital markets metrics present a complex picture. Cushman & Wakefield reports $3 billion in R&D property sales during Q3, up 50% from a year earlier, while Newmark shows $3.5 billion in deals. CBRE, which focuses on seven core markets, records just $757 million in sales through the third quarter, the lowest volume in more than six years and 94% below the 2022 peak. Newmark notes improving funding for life science companies themselves, describing M&A activity as the strongest since 2021, and Cushman & Wakefield reports $7.3 billion of life sciences IPO volume year to date. Even so, Newmark estimates that life science property values remain 38.4% below peak levels, with owner-users accounting for 29.5% of acquisitions.
