D
espite a challenging 2024 marked by high vacancy rates and tightened capital markets, the life sciences sector remains an attractive long-term investment opportunity. According to Colliers' 2025 National Life Sciences Report, the market is recalibrating after years of rapid growth but still buoyed by strong fundamentals and renewed investor interest.

    The report highlights that Greater Boston's life sciences commercial real estate has grown significantly over the past decade, with a 19 million square foot expansion representing an 84% increase. This growth underscores the sector's remarkable rise despite recent headwinds. Boston continues to dominate as a leading market, ranking high for National Institutes of Health (NIH) funding and venture capital investment.

    While macroeconomic factors have tempered enthusiasm in the short term, Colliers notes that venture capital funding in 2024 still outpaced 2023 by $5.6 billion, making it the fourth-best year on record. Institutional CRE investors are showing increased interest in life sciences properties, which now make up a share of the NCREIF NPI eight times higher than in 2016.

    The report identifies trends such as the conversion of traditional office space into lab environments and the expansion of established life sciences hubs. Despite a 1% decline in occupied space in 2024, employment in the sector is on the rise, with the biotechnology R&D workforce climbing more than 3% in 2024.

    The long-term outlook remains bullish, driven by a robust pipeline of treatments under investigation and high global spending on pharmaceuticals. However, concerns around new policies out of Washington, D.C., and uncertainty around Federal Reserve interest rate cuts may weigh on financing and expansion efforts. Nevertheless, Colliers concludes that the life sciences sector is fundamentally sound and will likely experience growth in the future.

    "The life sciences sector is weathering a market recalibration, not a collapse," Colliers writes. "The underlying drivers—innovation, talent, and capital—remain firmly in place." As developers adapt and investors reposition, the message from Colliers is clear: life sciences real estate may be down but it's certainly not out.