Market Observations
- In one of the strongest years on record, the FDA approved 55 new drugs in 2023. Cautious optimism has also returned to the public markets.
- Venture capital funding for life science companies decreased by 30.0% in 2023, although annual totals are in line with pre-pandemic volumes.
- Life science job growth has slowed. The roughly 30,000 jobs added through November 2023 is well below recent historic gains.
- Hiring remains cautious among life science companies. Job openings in the sector declined to a three-year low at the end of 2023 as a result.
- Demand is in line with pre-pandemic levels and leasing velocity has improved, but limited funding has sidelined many tenants.
- Availabilities are at all-time highs in most markets. Fundamentals are faring better in those with limited speculative construction.
- Despite nearly doubling in five years, asking rents are correcting materially in Boston and the Bay Area.
- A record 3.1 million SF of purpose-built laboratory product delivered in the top three markets in the fourth quarter of 2023.
- Dispositions and recapitalizations have been focused on key Boston submarkets, including the Seaport and Kendall Square.
