Rising Bay Area life science vacancy mirrors decrease in VC funding

–VC funding for Bay Area life sciences barely surpasses half a billion for Q4, marking a significant drop from the robust funding levels observed during the life science boom of 2020 to mid-2022 when quarterly funding regularly exceeded $2 billion.

–As we navigate the post-pandemic landscape and enter a higher-interest environment, the allure of volatile biopharmaceutical investments has waned. Coupled with the surge in the headline-making AI industry, it comes as no surprise that investors are currently diverted from the life science sector.

–Confronting financial challenges, an increasing number of life science companies are opting to sublease their spaces, contributing to a steady rise in the vacancy of life science spaces since 2022. With over 7 million square feet currently under construction, much of it due in 2024-2025, the life science market will likely face a vacancy issue. Landlords seeking to remain competitive will need to employ creative strategies, offering enticing amenities and concessions to attract prospective tenants.

Howard Huang