2025 Life Sciences ​Real Estate Perspective ​and Cluster Analysis

There has never been a lab market as favorable to tenants looking for space as today’s. As the life sciences real estate market continues to face a dramatic transformation, the reality is there are numerous headwinds preventing a robust recovery from happening in the short-term. The good news? Long-term structural advantages exist across major U.S. life sciences hubs. The 2025 Life Sciences Real Estate Perspective and Cluster Analysis examines the forces reshaping these hubs and evaluates regional competitive advantages across five critical dimensions: AI, start-up environments, biomanufacturing, talent and medtech.

Uncover which markets are best positioned to build the foundation for future growth.

The current landscape reflects a dramatic shift from the market peak. Lab leasing activity slowed to a glacial pace in Q1 2025, following some promising but limited momentum throughout 2024. With vacancy rates spiking to 27%—up 20.4 percentage points in three years—the pain of oversupply is falling disproportionately on newer buildings delivered since early 2022.

An absolute truth: The correlation between VC investment and lab demand

Lab leasing activity mirrors venture capital deployment patterns, with both trending downward since their peak. Lab leases have declined by an average of 8% per year while venture funding has dropped 12% annually. Biotech's share of venture dollars in the U.S. has fallen from approximately 15% to just 7% in recent quarters.

How rapidly are AI-native biotechs transforming the industry?

AI-native biotechs now account for one-sixth of all biotech VC deals, with the potential to fundamentally alter space requirements. These companies demonstrate a lower lab-to-office ratio of 45-to-55 and lease roughly one-third less space per employee than traditional biotechs.

Where are biopharmas sourcing licensing deals from?

Great research, low clinical costs and quicker trials have led biotech’s gaze towards mainland China. Chinese biotechs now account for four times the in-licensing deals for U.S. biopharma compared to 2021 levels. This trend represents a substitution of Chinese IP for American IP, creating additional headwinds for domestic lab demand recovery.

When will unprecedented lab oversupply conditions normalize?

JLL predicts that approximately 18.7 million square feet of the current 61 million square feet of available space will likely shift uses during the remainder of the decade due to distress or other factors. This supply disruption could reduce the availability rate from 29% to 20% by 2030.

While trade policy volatility, challenging funding environments and limited exit opportunities present near-term headwinds, markets with strong structural advantages in AI integration, biomanufacturing and talent are positioning themselves for the eventual recovery. Understanding these regional competitive strengths becomes critical as the industry navigates toward a more sustainable future.

Download the full report to access detailed cluster rankings, market-by-market analysis and comprehensive data on talent, funding and infrastructure across major U.S. life sciences hubs.