Life Sciences on the Rise: 2021 North American Report

LAB MARKET PERFORMANCE IS ON THE RISE As the COVID-19 pandemic hit office markets across the nation in 2020 and early 2021, life sciences lab space was one sector that was almost unaffected. Lab tenants—from pharmaceutical companies to biotechnology start-ups—continued to sign leases, markets remained tight for the most part, construction continued, and rents continued to rise. At the end of 2020, the average vacancy rate for the 14 U.S.-based markets stood at 8.7%, well below the national average office vacancy rate of 14.1%. Tighter markets lead to higher rents and nowhere is that more evident than in the life sciences lab sector. Rents for lab space averaged $43.80 in the markets covered in this report, well above the $34.45 national office space rent. Since lab rents are quoted triple net (NNN), the full-service asking rent for this space is even higher than that $43.80 would suggest. Some of the highest rents in the nation are for lab space in Boston, where the current NNN rent is $97.17. Rents in eight of the 14 major lab markets analyzed in this report have risen by at least 50% since 2015 led by Boston (+54%), the San Francisco Bay Area (+60%) and Seattle (+74%).

VACANCY RATE BY MARKET (Q4 2020)

10% 15% 20% 25% 30%

0% 5%

Vacancy Rate

RENT BY MARKET (Q4 2020)

$20 $30 $40 $50 $60 $70 $80 $90 $100 Rent (NNN $/SF)

$0 $10

Source: Cushman & Wakefield Research

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