Report: Area’s Life Sciences Real Estate Market Normalizes in 4Q
A new report from CBRE shows that the life sciences real estate market began to normalize in the fourth quarter, with rebounding numbers in venture capital and National Institutes of Health funding.
While lab vacancy rates increased and demand for space declined, funding in Seattle began to rise at the end of the year, with a fourth-quarter record of $341 million allocated to the life sciences sector. The industry has had significant funding over the last few years, as shown in Life Science Washington’s 2021 Investor report, indicating almost $5.1 billion was invested in the state’s biotechnology, medical technology, and digital health companies.
“There’s reason for optimism in Seattle’s life sciences sector,” said Hans Kemp, executive vice president and co-leader of CBRE’s life sciences practice in the Northwest. “Venture capital funding is near record levels, rental rates are at an all-time high, and the vacancy rate remains below equilibrium. Yet, the economic environment is making tenants hesitant to commit to real estate. Demand and transaction volume is extremely low. It will be interesting to see what unfolds in 2023 in markets like Seattle that are comprised primarily of early-stage organizations. When they are ready to move or expand, these companies will have an uncharacteristically large number of good options.”