BOSTON— The Greater Boston life sciences real estate market is currently in a state of turmoil, with record-high vacancy rates and diminishing venture capital funding creating a significant reshaping of the biotech landscape.
According to Colliers’ latest Q2 2025 report, the total available lab and life sciences space in the Greater Boston area has reached an all-time high of 17 million square feet.
This surge in available space is primarily driven by newly completed buildings that remain completely unleased.
The report indicates that 643,000 square feet of new inventory has come to market without securing a single lease, causing direct availability to climb to 13.4 million square feet.
When including sublease space, the overall availability rate has skyrocketed to 29.7%, marking an 8.6 percentage point increase in just one year.
This imbalance is largely attributed to a collision between speculative construction and a significant decline in demand, leading to an oversupply of laboratory space with minimal immediate interest from tenants.
The venture capital landscape has played a crucial role in this slowdown.
In the first half of 2025, Boston-based biotech firms attracted only $3.3 billion in venture capital, the slowest two-quarter period since the onset of the pandemic-era boom.
Valuations for biotech companies are on the decline, while initial public offering (IPO) activity remains sluggish, with only one IPO this year: Sionna Therapeutics.
Investor enthusiasm has waned due to poor returns and ongoing market volatility.
The S&P Biotech Index has dropped by 50% from its peak in 2021, compounded by worries about federal policy changes, such as potential cuts to NIH funding and staffing reductions at the FDA, which have further dampened investor sentiment.
MassBio raised significant concerns about the potential long-term implications for the biotech sector in its Q2 report.
Tenants, particularly those in the early stages of development, are now reassessing their real estate needs.
Where biotech companies once sought up to 8 million square feet of space in 2021, current demand has plummeted to just 2.8 million square feet, signifying a nearly two-thirds reduction in active demand.
Boston itself is facing the brunt of this imbalance.
Since 2019, the city has added over 6.7 million square feet of new life sciences space, more than doubling its pre-COVID inventory, yet more than 4 million square feet of this expansion remains vacant.
Highlights of the current market challenges include entirely empty buildings such as 305 Western Avenue, 601 Congress Street, and 2 Harbor Street, pushing Boston’s life sciences availability rate to over 38%.
This has left over half of the 2 million square feet set to be delivered in the next two years without tenants.
Some neighborhoods in the area have been particularly slow to gain traction.
While the Seaport has experienced substantial growth, now hosting 2.5 times more lab space than in 2020, regions like Downtown and Allston/Brighton have reported little to no net absorption over the same timeframe.
In contrast, Cambridge has been more resilient due to a more cautious approach to development.
The availability rate in Cambridge has held steady at 22.9%, showing only a modest increase from the previous year.
However, asking rents are on a downward trajectory, decreasing by 6% during the past year, and a record 2.7 million square feet remains unleased in East Cambridge.
Leasing activity in the city has been encouraging, with key deals such as Biogen’s 580,000 square foot lease at 75 Broadway and Intellia Therapeutics’ 101,000 square foot lease at 400 Technology Square, which includes expansion options.
Moreover, venture capital activity seems to be gaining momentum in Cambridge, as firms like ARTBIO and Merida Biosciences reinvigorate the funding landscape, making Q1 the most robust quarter for Cambridge funding since early 2022.
The suburbs present a more cautionary tale.
Despite delivering 6.4 million square feet of lab space since 2023, suburban availability has surged to 30.5%.
Five consecutive quarters of negative absorption have dampened the suburban market, prompting developers to halt speculative projects.
Distressed assets are beginning to transact at significant discounts, with notable transactions including Northeastern University’s purchase of the Burlington BioCenter for $301 per square foot, which reflects a 68% drop from its price in 2022.
Similarly, Stony Brook Office Park in Waltham sold for $94 per square foot in a June short sale, also a 68% decline from its last sale price.
A 272,000 square foot property in Wellesley was also auctioned in July, signaling the distress in the market.
Looking ahead, more than 3 million square feet are still under construction, with nearly 40% of that space remaining unleased.
Analysts predict that the Boston life sciences market is likely to experience further softening before any significant rebound occurs.
Vacancy rates are expected to continue climbing into 2026, particularly in Boston proper and its adjacent suburbs.
In the short term, tenants may have the advantage due to decreasing rents and increasing concessions.
However, landlords and developers, especially those managing empty or distressed properties, face a challenging and uncertain path toward stabilization.
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