What the Life Sciences Market Means for Your Next Lab
After several years of volatility, the US life sciences real estate market is showing signs of recovery. According to JLL's latest US Lab Property Report, lab availability has declined for the first time in years, dropping by approximately 2 million square feet since mid-2025. Yet despite improving demand in leading markets, significant oversupply remains, creating a highly competitive environment for owners, developers, and project teams planning new laboratory facilities.
One of the clearest trends emerging from the market correction is a pronounced “flight to quality.” Newer laboratory buildings are attracting tenants, while older facilities face increasing challenges. Buildings completed since 2020 have absorbed millions of square feet of available space, while older inventory continues to struggle. For project teams, the lesson is not simply to build newer buildings, but to build more adaptable ones.
Flexibility takes center stage
“Today's lab requirements are changing quickly, particularly with the acceleration of AI,” says Pam Paddock, managing director, Life Sciences Work Dynamics at JLL. “This is true for analytical computation in dry labs or robotics in wet lab environments. Flexibility is key in design inside the labs and in the associated workspace surrounding them.”
That emphasis on flexibility extends beyond the laboratory itself. As emerging technologies reshape research workflows, facility planners must think carefully about how space can evolve over time. Infrastructure decisions made during design and construction may determine whether a building remains competitive for decades or becomes obsolete within a few years.
Designing for AI and robotics
The growing influence of artificial intelligence, robotics, and other “tough tech” tenants is already changing design assumptions. Traditionally, laboratory infrastructure focused heavily on supporting personnel, chemical storage, ventilation, and safety requirements. Today, computational demands are becoming equally important.
“The advent and advancement of robotics and AI mean it is important to consider heat loads/cooling requirements needed for the work and not just the environmental needs of lab workers and chemical requirements, etc.,” Paddock says. “Each will be important in the use of space and success of processes.”
A tale of two markets
At the same time, owners must navigate dramatically different market conditions depending on geography. Demand remains strong in established hubs such as Boston, San Diego, the San Francisco Bay Area, and Raleigh-Durham, while many secondary markets continue to experience elevated vacancy rates and weaker leasing activity.
In stronger markets, speculative development may still be a viable strategy. According to Paddock, “Ready or nearly-ready construction can aid in attracting tenants.” Speed-to-market advantages can help owners capitalize on demand when tenants are actively seeking space.
In softer markets, however, a more measured approach may be warranted. Rather than fully building out specialized laboratory space before tenant commitments are secured, owners may benefit from investing strategically in infrastructure while preserving flexibility.
“Owners in those markets may want to prep enough design and complete sufficient construction to stay versatile in case there is reason to pivot away from lab space to something else,” Paddock says.
Planning for future reuse
This focus on versatility is becoming increasingly important as more laboratory properties are repositioned for alternative uses. More than 6 million square feet of lab space has already exited the inventory nationally, highlighting the value of adaptive reuse potential.
Paddock advises project teams to think carefully about future conversion possibilities from the outset. “Be thoughtful about infrastructure, placement of utilities, access points, health and safety needs, circulation, shipping/receiving and above ceiling access.”
Avoiding the overbuild trap
The current tenant-favorable leasing environment further reinforces the need for flexibility. With shorter lease terms, higher vacancy rates, and significant concessions becoming commonplace, landlords face pressure to satisfy diverse tenant requirements without overinvesting in highly specialized buildouts.
“Care should be taken to plan but not overbuild,” Paddock says. “Be ready and able to meet the varying needs of tenants without putting economic return in jeopardy.”
Preparing for the next growth cycle
Ultimately, the market's recent correction may offer valuable lessons for the next generation of laboratory projects. Rather than designing solely for today's tenant needs, project teams should prioritize resilience, adaptability, and speed to market.
“Think ahead about infrastructure, utility access, building amenities—be ready and nimble,” Paddock says. “Maintain relationships with partners who can react with you and help achieve speed to market when opportunity presents itself.”
As the life sciences sector enters its next growth cycle, facilities that balance flexibility with performance and preparedness with financial discipline will be best positioned to attract both traditional life sciences organizations and the emerging technology companies increasingly shaping the future of laboratory real estate.
