Boston–Greater Boston’s life sciences real estate market remains heavily tilted toward tenants, but declining construction activity and renewed leasing demand suggest the sector may be beginning to stabilize, according to a new Colliers report.
More than 20 million square feet of laboratory and life sciences space is available for lease across the region, representing about 35% of total inventory. Colliers said Boston has the largest volume and percentage of available life sciences space among major U.S. markets.
Nearly 80% of the available space is being offered directly by landlords, including substantial space in recently completed buildings that have not secured their first tenants.
Despite the elevated vacancy rate, the market recorded positive net absorption in the second quarter, meaning tenant move-ins exceeded newly delivered space. It was the first quarter of positive absorption in two years and helped push vacancy slightly lower.
A sharp reduction in speculative construction could further ease pressure on the market. About 2.8 million square feet of life sciences space remains under construction, with nearly 90% already preleased or being developed for specific tenants.
The smaller and more committed development pipeline reduces the likelihood that another large wave of vacant laboratory space will reach the market.
Landlords, however, continue to compete aggressively for tenants. More than 16 million square feet of directly available space remains on the market, prompting property owners to lower rents and offer larger concession packages.
In Cambridge, the weighted average asking rent has fallen about 25% from recent highs, according to Colliers.
Tenant improvement allowances for long-term leases in newly constructed laboratory buildings now generally range from $325 to $400 per square foot, roughly twice the level available four years ago.
Property owners are also building ready-to-occupy laboratory suites that can reduce construction expenses and allow companies to move in more quickly. Some landlords are marketing suitable buildings to companies outside the traditional life sciences sector.
Several large transactions supported leasing activity during the second quarter.
TransMedics signed a 500,000-square-foot lease for a new global headquarters at 188 Assembly Park Drive in Somerville. Sanofi extended its lease at Cambridge Crossing, including its 510,000-square-foot facility at 350 Water Street.
AdvanCell announced plans for a 128,000-square-foot headquarters and manufacturing facility at 1 Corporate Drive in Andover, while Stoke Therapeutics leased 98,500 square feet at 245 Fifth Avenue in Waltham.
Zealand Pharma signed a 53,000-square-foot lease in Cambridge’s Alewife neighborhood for a U.S. research hub. The ALS Therapy Development Foundation also expanded with a 33,000-square-foot lease at Arsenal Yards in Watertown.
The transactions helped offset new building deliveries and produced the market’s first positive absorption quarter since 2024.
Financing conditions remain a challenge, particularly for smaller biotechnology companies. Venture capital investment remains below previous peaks, and fewer financing rounds are being completed.
Capital constraints have led some biotechnology companies to reduce their laboratory footprints, offer excess space for sublease or pursue early lease terminations. Demand also remains well below the levels recorded during the industry’s rapid expansion earlier in the decade.
Public biotechnology markets have provided a more encouraging signal. The S&P Biotechnology Select Industry Index has risen more than 80% during the past year, helping create a stronger environment for initial public offerings.
Seven Boston-area life sciences companies have completed public offerings in 2026, raising approximately $3 billion combined. Cambridge-based Parabilis Medicines, formerly known as Fog Pharma, completed one of the largest biotechnology IPOs in recent years.
Broader economic conditions could still weigh on the region’s recovery. The Boston metropolitan area lost about 12,000 jobs over the past year, a decline of 0.4%, according to U.S. Bureau of Labor Statistics data cited by Colliers.
Employment weakness has been concentrated in education, healthcare and professional services, which are among the region’s largest industries. International migration into Greater Boston has also fallen to its lowest level since the height of the COVID-19 pandemic.
Colliers said the market remains favorable for tenants, which continue to benefit from abundant space, lower rents and generous improvement allowances. However, the end of the speculative construction surge, improving leasing activity and stronger public markets indicate that Greater Boston’s life sciences real estate sector may be moving toward a more balanced environment.
