### 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, the industry also experienced notable positives, such as increased global venture capital, a rise in mergers and acquisitions, and record employment growth in the U.S. Additionally, the sector remains in a period of unprecedented innovation and discovery, according to CBRE’s *U.S. Life Sciences Outlook 2025* report.
Looking ahead to 2025, CBRE and Cushman & Wakefield forecast continued funding for the sector and suggest that the commercial real estate (CRE) market could begin a recovery.
### Continued Funding in 2025
Both CBRE and Cushman & Wakefield predict that venture capital and other funding sources for life sciences, which gained momentum in 2024, will persist into 2025. Cushman & Wakefield analysts highlight investor enthusiasm for ongoing innovation in the sector and suggest that broader economic strength has helped drive capital into life sciences investments. This trend is expected to continue.
CBRE analysts also point to U.S. economic resilience as a factor that should help sustain life sciences revenues. Additional positive indicators include improving capital markets, record-high employment in the sector, growing demand for lab and R&D space, and ongoing scientific advancements in pharmaceuticals, cell and gene therapy, and clinical trials.
### Real Estate Impact
In 2024, life sciences lab and R&D property sales dropped to their lowest level in over a decade, largely due to high interest rates and weak supply-and-demand fundamentals. However, CBRE suggests that improved macroeconomic conditions, increased demand, and lower interest rates could drive more investment sales in 2025. That said, a significant wave of new supply in early 2025 could pose challenges.
Cushman & Wakefield concurs with the expectation of increased transaction activity, signaling a potential recovery in the commercial real estate sector. While CBRE notes a surge in new deliveries, Cushman & Wakefield points out a slowdown in the construction pipeline, providing the sector with some relief.
Moreover, leasing activity is expected to pick up, leading to increased space absorption throughout the year. Cushman & Wakefield analysts emphasize that well-capitalized companies are in a stronger position to make long-term strategic decisions, which may include expanding their workforce and physical footprint.
As 2025 unfolds, the life sciences industry is set to benefit from sustained investment, economic stability, and a real estate market potentially on the path to recovery.
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.
