The U.S. life science sector is grappling with an oversupply of lab space, leading to significant vacancy spikes across major hubs, our latest U.S. office market report shows. In response to post-pandemic demand, developers have delivered over 33.5 million square feet of life science space since 2020, with another 26.4 million square feet still under construction. However, a decline in funding has stalled demand, leaving many of these new developments without tenants. This has contributed to soaring vacancy rates across key markets:  

• The Bay Area vacancy rate surged by 550 basis points 

• Boston saw a rise of 540 basis points 

• San Francisco followed closely with a 440-basis-point increase 

• San Diego’s rate climbed by 310 basis points 

National office trends:  

• The national vacancy rate rose to 19.4%, up 200 basis points year-over-year 

• Almost 70 million square feet of office space are under construction nationwide, accounting for 1.0% of total stock 

• A total of $20.9 billion in office sales was recorded by the end of August, with an average price of $173 per square foot 

• Los Angeles posted the highest national average sale price at $437/sq. ft., surpassing Manhattan’s, which fell to $386/sq. ft.   

• The Twin Cities saw sales volume nearly doubling month-over-month, reaching $527 million in August 

• Washington, D.C., saw office construction fall sharply, from 4.3 million square feet underway last year to 2.1 million in August 2024 

For more in-depth market insights on the top 25 office markets, read our report here: https://www.commercialedge.com/blog/national-office-report/    

You can also check our previous reports here: https://www.commercialedge.com/blog/tag/office-reports/