Vacancy Climbs As Legacy Labs Fall Out Of Step With Modern Science
The life sciences sector overbuilt for yesterday's science, leaving a wave of vacancy and functional obsolescence across major markets. Now landlords, developers and occupiers are racing to retrofit for tomorrow's needs, as AI, automation and robotics redefine lab design and infrastructure needs, according to a CNBC report.
After a surge of development during the pandemic-era boom, the market was hit by a sharp pullback, in part due to federal funding cuts and a slowdown in biotech demand. Vacancy across the 10 largest life sciences markets reached 27.4% in the first quarter, up from 25.7% a year earlier, with availability surpassing 30% in key hubs like Boston and the San Francisco Bay Area, according to JLL data cited by CNBC.
But the glut is proving to be less about volume and more about relevance. Much of today's empty inventory was not designed for the next generation of research, creating a widening gap between legacy lab space and facilities that can support emerging technologies.
Artificial intelligence, automation and robotics are rapidly shrinking the footprint of traditional wet lab space while increasing demand for power, cooling and structural capacity. In many cases, landlords are effectively being asked to accommodate hybrid environments that function as both laboratories and small-scale data centers, with the infrastructure to support high-performance computing and advanced equipment, the report said.
That shift is forcing a portfolio-wide rethink. Large biotech and pharmaceutical tenants are reassessing their existing campuses to determine whether assets can be upgraded or consolidated into newer, more efficient facilities. JLL estimates that as much as 19 million square feet of available lab space could be converted to alternative uses by 2030.
At the same time, the supply pipeline is resetting. Construction activity has fallen to its lowest level since 2017, while venture capital began returning to the sector in the second half of 2025 at its strongest pace since 2022. Availability is projected to decline to roughly 20% by the end of the decade, though demand is expected to favor higher-quality, tech-enabled space.
Even as automation reduces the need for certain types of lab work, it is also reshaping how space is used. Facilities must now accommodate interdisciplinary teams of scientists, engineers and AI specialists, blending quiet, controlled environments for research validation with more collaborative settings.
Major occupiers are already moving in that direction. Genentech, for example, is investing billions to modernize and consolidate its global research footprint, reflecting a broader shift toward integrated, future-ready campuses.
Source: GlobeSt/ALM