Market Observations
- 2024 represents the fourth-highest year on record for U.S. venture funding, and the number of “mega-rounds” has increased materially.
- Continued momentum in FDA novel drug and biologics license approvals is signaling investment opportunities in the biotech sector.
- Amid labor market headwinds, job openings and wage growth are accelerating in the life science industry. The latter reached its highest rate since 2020 in mid-2024.
- The public markets are slowly thawing. The 30 companies that executed initial public offerings in 2024 represents the second consecutive year of modest growth in IPOs.
- Tenant demand and leasing stabilized during the second half of 2024, but many occupiers need additional funding to transact.
- The sublet market stabilized late in 2024, with availabilities declining by nearly 200,000 SF across the top U.S. markets.
- Lingering vacancy in many key life science markets could take several years to work through.
- Supply risk continues to abate, with select development sites and existing assets pivoting to housing and office uses.
- Liquidity improved noticeably during the second half of 2024, with R&D transaction activity up 22% compared to the previous year.
