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The Life Sciences Tenant Q4 2023

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In 2023, life sciences companies had to quickly pivot and learn to do more with less as funding fell from record-high levels. Over the last year, leasing activity from the sector slowed as tenants became highly cost-conscious. This shift in demand, combined with significant amounts of new inventory from bullish developers, has changed the supply and demand dynamics in favor of tenants.

Tenant-friendly market dynamics present a silver lining for life sciences occupiers. The prevalent surplus of discounted sublease options unveils a golden opportunity for tenants to optimize their workspace quality and employee experience at a fraction of the pre-pandemic cost, backed by higher concessions. Life sciences tenants have begun to take advantage of these opportunities at the end of 2023 with some sizeable transactions, such as AstraZeneca signing a full building lease of 198,000 square feet (sf) in Gaithersburg, Maryland, at 700 Progress Way.

Key Takeaways:

  • Federal and state level governments are working to help grow the life sciences industry, with officials increasing investments and offering more incentives for companies across the nation.
  • In 2023, drug discovery and biotech verticals received the most venture capital funding across all major life sciences markets.
  • After a pandemic-fueled boost to the sector, life sciences companies have adjusted to market normalization and may be more comfortable making real estate decisions moving forward.

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