Although the U.S. life sciences real estate market has struggled for much of the past four years, with overbuilding and sluggish demand contributing to once-tight vacancy rates exceeding 20% across the top 13 markets, CBRE and Cushman & Wakefield reported signs of a recovery as 2025 drew to a close. CBRE said the fourth quarter of 2025 brought the first decline in vacancies since Q2 2022, while Cushman & Wakefield reported meaningful improvement in life science funding activity in the second half of 2025.
U.S. venture capital funding for life sciences totaled $29.8 billion in 2025, down modestly year-over-year. However, activity strengthened significantly in H2 2025 as investor sentiment improved, and average deal sizes rose to $16 million, nearly 50% above the 10-year average, according to Cushman & Wakefield.
“Improved funding visibility is giving life sciences companies more confidence as they plan ahead,” said Sandy Romero, head of office and alternatives insights at Cushman & Wakefield. “At the same time, firms remain disciplined in how they deploy capital, especially when it comes to long-term real estate commitments.”
CBRE reported a construction slowdown and recent gains in demand for space led to a 30-basis-point decline in vacancy to 23% in Q4, while construction completions fell by 88% from the previous quarter and in-progress construction sits at its lowest level since mid-2017. Simultaneously, net absorption was positive in Q3 and Q4 after remaining negative in the first two quarters of 2025.
“We’re seeing an increase in activity driven by multinationals continuing their trend of reshoring and consolidating,” said Matt Gardner, CBRE Americas life sciences Leader. “Meanwhile, resilience in hiring and fundraising activities in the life sciences industry suggests more positive absorption this year.”
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