The Once Red-Hot Life Sciences Sector Returns to “Normalcy”

Sponsored by ECBuild / EwingCole

As the U.S. commercial real estate market adapts to rising interest rates and a less certain outlook for the economy, the life sciences sector remains a strong performer. But some signs of a slowdown are appearing even here.

In the third quarter, occupancy dipped to 94 percent across the top 12 U.S. life sciences markets—from a peak of 95 percent in the first quarter of 2022, according to a November report from commercial real estate services firm CBRE. CBRE also registered a 30-basis-point increase in quarter-over-quarter vacancy, to 5.3 percent. That was largely due to a significant amount of new supply (2.1 million sq. ft.) hitting the market, leading the addition of available new space to outpace absorption of 363,047 sq. ft., the firm’s researchers estimate.

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