Key facts
- Greater Boston's lab market vacancy rate is 33.3%, persisting above 30% for three years.
- Asking rents for lab space in Greater Boston have decreased by more than 20% since mid-2022.
- Boston's average asking rent for lab space is $76.72 per SF, exceeding other major markets.
- Some speculative office-to-lab conversions are being reverted to their original office use.
- Leasing demand in top markets, including Boston, rose 44% last quarter compared to Q1 2025.
- Demand is increasingly driven by 'tough tech' sectors like AI, robotics, and defense.
Boston's life sciences real estate market is experiencing a downturn, with vacancy rates remaining high despite a recent drop in rents. Greater Boston's lab market reported a 33.3% vacancy rate last quarter, a figure that has stayed above 30% for three consecutive years. Asking rents have fallen more than 20% since mid-2022, including a 9.7% decrease between the first quarters of 2025 and 2026. However, Boston's average asking rent of $76.72 per square foot remains higher than other major markets like the Bay Area and San Diego.
Industry experts suggest that a significant reset is needed to revive the market. Joe Collura, Managing Partner at HelixPoint Capital, noted that large speculative office-to-lab conversions may need to be reverted to their original use. He also indicated that rents might need to fall further, but landlords face a price floor due to high construction and debt costs. Collura suggested that distressed trades and basis resets, where new owners can offer more flexible rents, are likely to become more common.
Recent transactions illustrate this trend. In May 2025, Northeastern University acquired the Burlington BioCenter for $33 million, a third of its 2022 price. Battery manufacturer A123 Systems purchased a 115,000-square-foot building in Burlington for under $20 million, a 52% discount from its 2021 price. Lightstone Group acquired another lab building for $16 million, significantly below its 2022 purchase price.
Despite these challenges, there are signs of recovery. JLL's latest report indicates that the market has bottomed out, with leasing demand in top markets like Boston increasing by 44% last quarter compared to Q1 2025. Demand is being fueled by 'tough tech' companies in sectors such as AI, robotics, aerospace, defense, and medtech. LabCentral, an incubator space, is experiencing a surge in applications, particularly from AI and biotech startups, indicating a positive, albeit gradual, recovery trajectory.