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**Life Sciences Market Shows Signs of Recovery as 2025 Ends**
The U.S. life sciences real estate market, which has faced significant headwinds over the past four years due to overbuilding and weak demand, is showing early signs of recovery. According to recent reports from CBRE and Cushman & Wakefield, conditions began to improve as 2025 came to a close.
CBRE reported that the fourth quarter of 2025 marked the first quarterly drop in vacancy rates since Q2 2022. Across the top 13 U.S. markets, vacancy rates, which had soared above 20%, declined slightly by 30 basis points to reach 23%. A significant driver behind this change was a notable slowdown in construction activity—new completions fell by 88% compared to the previous quarter, and ongoing construction hit its lowest level since mid-2017. At the same time, demand improved, with net absorption turning positive in both Q3 and Q4 after two consecutive quarters of negative absorption earlier in the year.
Investment trends in life sciences also began to shift. While U.S. venture capital funding for the sector totaled $29.8 billion in 2025—representing only a modest year-over-year decline—Cushman & Wakefield noted that funding activity picked up substantially in the second half of the year. Investor sentiment improved, and the average deal size rose to $16 million, which is nearly 50% higher than the 10-year average.
“Improved funding visibility is giving life sciences companies more confidence as they plan ahead,” said Sandy Romero, head of office and alternatives insights at Cushman & Wakefield. “At the same time, firms remain disciplined in how they deploy capital, especially when it comes to long-term real estate commitments.”
Matt Gardner, Americas Life Sciences Leader at CBRE, echoed the positive outlook. “We’re seeing an increase in activity driven by multinationals continuing their trend of reshoring and consolidating,” he said. “Meanwhile, resilience in hiring and fundraising activities in the life sciences industry suggests more positive absorption this year.”
While challenges remain, especially with elevated vacancy rates still prevalent in major markets, the data suggests a cautiously optimistic path forward for the life sciences real estate sector as it enters 2026.
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