How Flexibility and AI Are Reshaping the Future of Lab Real Estate
As the US life sciences real estate market resets, flexibility in lab design is emerging as the key to adapting existing spaces and meeting the evolving needs of research and workforce dynamics. Image: Courtesy of JLL
After years of record growth and a surge of new construction, the US life sciences real estate market is facing a major reset. According to JLL’s 2025 Life Sciences Real Estate Perspective and Cluster Analysis, more than 61 million square feet of lab space is currently available for lease—three times the amount on the market just four years ago. Demand has fallen by half in that same period.
But for lab planners, architects, and developers, this slowdown may also mark the beginning of a new era in how research space is designed, built, and used.
“Anytime you can adjust the utilization of space to be flexible, it makes it easier to adapt as things change,” says Pam Paddock, managing director in JLL’s life sciences business. If project teams are working within an existing footprint, the ability to potentially make room at the edges helps, she says. “For instance, if you want to recapture space and turn it into office space as the number of people in the labs goes down, and number of people in the office or workspace areas increases—it’s about building in flexibility as you make changes.”
That theme—flexibility as a design foundation—runs throughout both the JLL report and Paddock’s observations from the field. Whether it’s AI-driven research changing space ratios or companies rethinking where and how they build, the most forward-looking labs are those that can evolve.
The AI shift: smaller footprints, smarter infrastructure
AI-native biotechs are emerging as one of the biggest disruptors in the sector. According to JLL’s report, these firms lease roughly one-third less space per employee than traditional biotechs and maintain a 45-to-55 lab-to-office ratio, a clear signal that computing and collaboration are becoming as important as wet bench space.
That shift comes with design implications. “Anytime you’re going to be looking at that kind of augmentation of your needs, you want to be able to prepare in advance with some modular systems,” says Paddock. She advises planners to design electrical and HVAC load capabilities to accommodate higher computational demands and robotics integration. “Getting your services to centralized locations that become then adaptable to different uses is the best path forward.”
The takeaway for project teams? Design for plug-and-play adaptability. Anticipate heavier power and cooling loads, centralize utilities, and plan IT space that can scale alongside AI adoption. Retrofitting these systems later can be difficult and costly—especially as data density becomes a defining characteristic of next-generation labs.
Rethinking the vacancy problem
While AI firms need less physical space, the rest of the market is dealing with the opposite issue: too much of it. JLL reports that labs built between 2022 and 2024 now carry a 48 percent vacancy rate, the highest among all building vintages. That glut has opened up opportunities for tenants—and lessons for designers.
“There’s going to be a slowdown of construction of those kinds of spaces,” Paddock says. “So it’s definitely about leveraging what’s already built.” She adds that landlords are eager to keep these facilities operating as labs rather than converting them to office use, meaning tenants have leverage. “Organizations will find more bang for their buck as they’re in those conversations … landlords want those spaces to be used without having to repurpose them.”
For those embarking on new construction, the message is clear: build flexibility into your shell and core, and avoid over-specialization that limits future reuse. Features like adaptable mechanical systems, demountable partitions, and universal service corridors can reduce long-term vacancy risk by making spaces easier to convert or sublease.
With many tenants opting to stay put and modernize older buildings, the art of retrofitting is becoming central to lab planning. Paddock acknowledges the challenges but says upgrades are well within reach.
“Retrofitting existing space—Class B space, for instance—can be a little bit tricky, but it’s not impossible,” she says. “Getting a well-experienced designer to work with value engineering comes along as part of the requirement any time an organization is going to refit a space.”
She continues, “You want to make sure that you're really investing [by] making sure that utilities are centralized and flexible so you have the continuing ability to adjust your space. So in any renovation, perhaps adding in additional opportunities for flexibility is will be a new focus.”
The report echoes this, noting that as 18.7 million square feet of lab space may convert to other uses by 2030, proactive owners can protect asset value by future-proofing their infrastructure now. Modular lab furniture, reconfigurable air systems, and upgraded data capabilities can keep older spaces competitive in an AI-enabled research landscape.
Reshoring, CDMOs, and talent searches
New Jersey ranks #1 among top biomanufacturing hubs, driven by its high concentration of CDMO facilities, strong production capacity, and the nation’s largest workforce of biomanufacturing professionals. Image: Courtesy of JLL
One of the few bright spots in the market is biomanufacturing—especially contract development and manufacturing organizations (CDMOs). JLL ranks New Jersey as the nation’s top biomanufacturing hub thanks to its deep workforce, CDMO concentration, and proximity to pharma headquarters.
“Reshoring is actually a great opportunity for CDMOs,” Paddock explains. “When an organization is looking to bring something back onshore versus building a brand-new site on a brand-new piece of property for a brand-new use, a CDMO offers the opportunity for speed to market of what is being reshored.” That advantage, she notes, makes New Jersey and similar markets “tremendous” candidates for reshored operations.
For design teams, this means prioritizing cGMP flexibility and quick adaptation—facilities that can handle multiple client needs and process types without major rework.
Despite softening demand in some regions, JLL’s cluster rankings reaffirm that Boston, the Bay Area, and San Diego remain top-tier hubs. These markets still command high rents and high vacancy—but also the densest talent pools. For tenants, that paradox can translate into opportunity.
“You can create a little bit of a market for your dollars with those entities, because they’re going to want to attract that occupancy,” Paddock notes. And for landlords, the design imperative is to make their properties talent magnets. “There’s a war on talent,” she says. “As much as there may be more space than one might prefer in some of these asset categories, the talent is the key—and the Bay Area is particularly attractive for people with the talent in the AI space and the innovation space. The war is then about attracting that talent and making it amenable to the experience that people want to have when they come into the office or come into the lab.”
The global context, and what comes next
Paddock cautions that reshoring and regional investment don’t exist in a vacuum. “Every entity that is manufacturing or doing research in the US may be getting its intellectual property from elsewhere,” she says. “There’s this very deep look at how dollars are being spent, and that harkens back a bit to the CDMO conversation—there’s an opportunity to leverage entities that are experts in these contract models, whether it’s a contract lab or a contract manufacturer. They can become very attractive to organizations that may be headquartered outside the United States.”
That interconnected reality means future lab designs must balance domestic resilience with global collaboration—spaces that can handle sensitive IP, accommodate international teams, and support hybrid operations across borders.
As the market rebalances, the labs that succeed will be those that anticipate change rather than react to it. That means designing for a continuum: physical and digital, lab and office, human and machine. As Paddock says, success starts with flexibility. “Build that flexibility around the edges so that you might be able to leverage space into a sublease market, or into other densification opportunities,” she says, while also accommodating adjacent uses and future space needs that align with the kind of laboratory work you may be doing down the road.
