March 2025 Life Sciences Update

Pricing Trends Lower

03

CONTENTS

R&D Pricing and Cap Rates

• Pricing softened in 2024, with the price per square foot (psf) falling 14% YOY to $255 psf. At this level, pricing is down roughly 38% from its peak and is below the 10-year average. • Average cap rates rose at year-end to 6.7% on a four-quarter rolling basis, up 100 bps from their 2022 lows. • With interest rates remaining at higher levels, cap rates are expected to remain higher as the cost of capital remains elevated. Buyers will need to continue to balance higher debt costs with potential acquisition opportunities.

Average of PSF/PPU

Average of CapRate

$500

7.5%

$400

7.0%

$300

6.5%

•

$200

6.0%

Sales Price PSF, 4-Qtr Rolling Average

Capitalization Rate, 4-Qtr Rolling Average

$100

5.5%

$0

5.0%

2017

2017

2017

2017

2021

2021

2021

2021

2015

2015

2015

2015

2018

2018

2018

2018

2016

2016

2016

2016

2019

2019

2019

2019

2022

2022

2022

2022

2023

2023

2023

2023

2024

2024

2024

2024

2020

2020

2020

2020

Source: MSCI Real Capital Analytics, Cushman & Wakefield Research

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Cushman & Wakefield