The spotlight continues to be on the Life Science real estate sector as the industry works to absorb the significant amount of new inventory coming online. Nationwide, 23 million square feet of new space has opened in the last 12 months representing roughly 6% of inventory. In previous quarters, absorption of space has not been able to keep up with the amount of new supply delivered. Occupancy has dropped 530 basis points from the peak in early 2022 and now stands at 89.9%. However, a recent pickup in demand has resulted in a flattening of occupancy in the most recent quarter. The rebound in venture capital funding so far this year is likely contributing to the increasing need for space.
Looking ahead, we have another 57 million square feet of Life Science space currently under way. Some of this inventory may convert or market to other tenant types, but much of it will open over the next 2 years, continuing to add supply pressure to occupancy. Follow this trend and more by subscribing to RevistaLab!
