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The U.S. life sciences sector is navigating a period of recalibration, as vacancy remains near historical highs and a sharp pullback in development contrast with resilient industry fundamentals. Capital remains active but increasingly selective, with strong M&A activity, sustained manufacturing investment and a broader geographic distribution of venture funding signaling continued confidence in the sector.
Highlights from the report:
- National overall vacancy rose to 24.5% in Q2 2026, up from 22.8% a year ago, with both direct and sublease vacancy remaining near historical highs as the market works through years of oversupply.
- Life sciences development continues to slow as the market digests the millions of square feet added over the past couple of years.
- New York and Philadelphia funding surged 128.6% and 99.1% year over year in the first half of 2026, as capital broadens beyond typical major markets.
- More than $12 billion in new U.S. manufacturing investment has been announced since the beginning of 2026, underscoring continued confidence in the sector despite elevated lab vacancy.
- Life sciences M&A totaled $86.3 billion across 93 deals in the first half of 2026. Larger acquisitions could reshape occupier footprints, supporting demand around strategic assets while prompting consolidation elsewhere.