San Francisco Life Sciences Market in Reset Moment as Investors Recalibrate
The San Francisco Bay Area life sciences market is clearly in a reset moment, according to a new report from Cushman & Wakefield.
"Rents have eased, and vacancies are still high, but with very little new supply coming online and strong venture capital activity, the long-term outlook remains positive," Jason Karbelk, research manager at Cushman & Wakefield, told GlobeSt.com.
"It's a market that's recalibrating today."
In the fourth quarter, life science vacancy in the city ticked up by 210 basis points year-over-year to 29.1 percent, with average asking rents declining to $5.89, from $6.16 per square foot in the same period a year ago.
Overall, San Francisco remains one of the most compelling life sciences investment markets in the world, driven by a combination of scale, talent, capital concentration and long-term development momentum, according to Cushman & Wakefield.
With more than 51 million square feet of lab inventory across the Peninsula and East Bay—two of the nation's most productive research hubs—the region offers investors a deep, diversified tenant base and a track record of sustained industry expansion.
The Bay Area's highly educated workforce—supported by globally recognized research institutions such as UCSF, Stanford and UC Berkeley—continues to generate a steady pipeline of new companies, breakthrough science and venture-backed innovation.
This talent density reinforces the region's position as a top-tier cluster where life sciences companies want to locate and grow.
Investors also benefit from the world's largest concentration of life sciences venture capital and private equity. This capital ecosystem reduces early-stage risk and accelerates demand for specialized R&D space.
Leasing activity remains anchored by biotechnology and pharmaceutical firms, with medical device and health-tech companies adding depth to the market. This sector diversity helps stabilize occupancy and creates multiple avenues for long-term growth.
Years of strong demand have led to robust investment interest. Developers have delivered nearly 21 million square feet of new and converted lab space since 2016. A major wave of completions in 2025 cleared the near-term pipeline.
While supply remains limited, more than 18 million square feet remains in planning—much of it speculative—further signaling continued confidence from developers and investors alike.
Source: GlobeSt/ALM