- JLL reported nationwide lab rents down nearly 18% since 2023 to $64 PSF. Free rent averages one month per lease year.
- Several major lab projects remain lightly occupied or vacant, pushing landlords to broaden their tenant mix beyond traditional biotech.
- Debt risk is growing as weak leasing meets major maturities and investments made during the pandemic-era boom.
Life sciences real estate is showing early signs of stabilization, but landlords still face weak leasing and tenant-friendly economics. Bisnow reports that operators are fighting to retain tenants, fill vacancies, and wait out a slow recovery. Rent cuts, concessions, and broader tenant searches remain central to that effort.
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Life Sciences Real Estate Leasing Stays Weak
JLL reported that nationwide lab rents have fallen nearly 18% since 2023 to $64 PSF. Average free rent on new leases has climbed to one month for every year of term. A TransMedics headquarters lease at BioMed Realty’s 188 Assembly Park Drive in Somerville illustrates the pressure. The deal includes nearly two years of free rent. Its base rate is near $3.50 PSF per month, or $42 PSF annually.
Landlords Broaden the Tenant Mix
Operators are looking beyond traditional biotech users to fill space. Oxford Properties said it is seeing more interest from advanced manufacturing occupiers. The firm has also landed activity from major pharmaceutical and healthcare users. Oxford completed a 165K SF build-to-suit phase for Ionis Pharmaceuticals in Carlsbad in August 2025. It later expanded an Eli Lilly lease by 75K SF in Boston’s Seaport.
Flagship Projects Show Strain
The life sciences slowdown is visible across major portfolios and campuses. Longfellow’s 323K SF Bioterra project in San Diego opened in 2025 and still has no tenants. Longfellow’s overall occupancy is around 80%. Kilroy Realty reported 82% portfolio occupancy in May. Oyster Point Phase 2 in South San Francisco was 49% leased and 7% occupied during Kilroy’s Q2 earnings call.
Debt Becomes the Next Test
Weak leasing is colliding with debt taken on during the sector’s boom. BioMed bought the 1M SF FlatIron Park in Boulder for $625M in 2022. It later extended a $2.9B origination loan from Deutsche Bank to May 2027. Longfellow sold a New York City lab development for $87M. It had paid $92.5M with a partner and invested another $100M in property improvements.
Why It Matters
The market is no longer only a leasing story. Landlords must balance lower rents and concessions against debt terms and property cash flow. Colliers executive Joe Fetterman told Bisnow that the biggest problems are likely to be debt-driven. He described the risk as property-specific rather than a sectorwide collapse. Each landlord’s maturity schedule, occupancy, and underwriting assumptions now matter more.
What’s Next
Operators expect the recovery to be slow and uneven. Biotech market indicators have improved, but that has not yet translated into broad leasing demand. BioMed faces 1M SF of lease expirations in 2027 after leasing 1.5M SF over the prior 12 months. The next phase will test whether landlords can keep filling space before debt and lease maturities force harder decisions.
