News Summary
Boston’s lab market is struggling with high vacancy rates despite nearly 1 million square feet of new lab space certified by the BPDA. Key developments, including Eli Lilly’s $700 million facility, offer a glimmer of hope, but many projects are launching without tenants. Reports indicate that one-third of lab space is currently available for lease, raising concerns among landlords and developers. The Massachusetts state legislature’s investment of $500 million in the life sciences sector highlights ongoing support for the industry despite challenges, including federal funding uncertainties.
Boston is grappling with a significant challenge in its lab market, as high vacancy rates persist despite recent developments and investment initiatives. The Boston Planning and Development Agency (BPDA) has certified nearly 1 million square feet of new lab space, yet a substantial oversupply issues are leading to growing financial concerns for landlords and developers in the region.
A key development contributing to the newly certified lab space is Eli Lilly & Co.’s $700 million research and development facility along Fort Point Channel. Originally constructed without a tenant, this project has successfully secured leases and is now fully occupied. In contrast, another lab building at the former Au Bon Pain headquarters in the Seaport District is poised to open empty after Ginkgo Bioworks withdrew due to financial issues. Similarly, a 350,000-square-foot lab space in Boston Landing will also be opening without tenants, save for a coffee shop located on the first floor.
The overall lab market is currently facing an alarming reality, with nearly one-third of all lab space available for lease. Research from Newmark and Colliers indicates that 3 to 4 million square feet of lab space remain under construction, which could potentially inflate the market size by over 5%. Presently, Greater Boston has 16.3 million square feet of lab space available, while only 1.9 million square feet has active tenant interest.
The first quarter of this year marked a significant moment, as it was the first time since 2022 that Greater Boston did not see any new lab completions. This stagnation is raising alarms among landlords, many of whom are increasingly at risk of financial distress due to persistent vacancies. As the amount of vacant space continues to rise, there is an escalating probability of distressed asset sales within the market.
The situation has worsened over the last quarter, with the life sciences market reporting a delivery of 2.2 million square feet of lab space in the fourth quarter of 2024, causing vacancies to surge from 27.7% to 31.1%. An emerging trend appears as companies shift their focus from seeking new lab space to acquiring office spaces, indicating a pivot towards capitalizing on products that are already in the trial phase, rather than investing purely in drug discovery.
Despite these challenges, the Massachusetts state legislature has shown a commitment to supporting the life sciences sector, approving $500 million over the next decade to bolster the industry following previous significant investments. However, industry leaders are raising concerns over possible federal funding cuts to the National Institutes of Health under the current administration, which could adversely affect Boston’s biotech landscape.
Though the market is facing pressures, regions such as Cambridge and Greater Boston remain recognized as premier biotech hubs, supported by their long-term economic fundamentals. Nationally, the U.S. life sciences sector is experiencing similar challenges, with an increase in vacant lab spaces reported across various cities.
Reports from JLL illustrate a trend known as “flight to quality,” wherein tenants are gravitating towards established submarkets such as East Cambridge, Fenway, the Seaport, and Watertown. This trend suggests that tenants prefer neighborhoods that are already familiar and well-integrated with biotech companies as they navigate the complexities of the current market.
As the lab market continues to evolve, stakeholders in Boston must grapple with both the opportunities presented by new developments and the significant challenges posed by rising vacancy rates and market trends.
Deeper Dive: News & Info About This Topic
HERE Resources
Jamaican Men Sentenced for Major Money Laundering Operation
Greater Boston’s Thriving Comic Book Scene
Federal Government Plans to Sell Captain John Foster Williams Coast Guard Building
Boston Housing Authority Requests Rent Freeze for Section 8 Tenants
Viator Announces Top Tours for New England
Four Massachusetts Cities Among Best Places to Live in U.S.
Tom Brady Invests in Boston-Based Crypto Startup Catena Labs
PLAY Airlines Launches Memorial Day Sale from Boston
Massachusetts Biotechnology Sector Faces Challenges from Proposed Tariffs
Boston Approves Office-to-Residential Redevelopment Projects
Additional Resources
- Boston.com: Empty Lab Space in Greater Boston
- Boston Globe: Lab Space Vacancies in Boston
- Banker & Tradesman: Boston Area Lab Vacancies
- Wikipedia: Lab Space
- Google Search: Boston Biotech Lab Market
Author: STAFF HERE BOSTON WRITER
BOSTON STAFF WRITER The BOSTON STAFF WRITER represents the experienced team at HEREBoston.com, your go-to source for actionable local news and information in Boston, Suffolk County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Boston Marathon, Head of the Charles Regatta, and Boston Harborfest. Our coverage extends to key organizations like the Greater Boston Chamber of Commerce and Associated Industries of Massachusetts, plus leading businesses in finance, biotech, and insurance that power the local economy such as Fidelity Investments, Biogen, and Liberty Mutual Insurance. As part of the broader HERE network, we provide comprehensive, credible insights into Massachusetts's dynamic landscape.
