Originally published by Amanda Abrams on March 1, 2023, for UrbanLand Magazine.

“It has been a historic run,” said Matthew Gardner, CBRE’s head of life sciences for the Americas, speaking at ULI’s 2023 Carolinas Meeting in February.

Gardner was addressing the U.S. market for life sciences real estate. While the field had been hot since around 2015, it began to boom in 2020 as a result of the COVID-19 pandemic and the race to create a vaccine. That boom hit a peak in mid-2022, and the market has since cooled. But the contraction has been relatively mild, said Gardner.

“The absorption rate has slowed, but not at the levels we feared,” he explained. In many of the nation’s hottest life sciences markets, like Boston and San Francisco, vacancy rates still hover around 2 percent. While conversions of existing spaces have slowed, the pace of new construction remains steady.

And the potential for continued growth is robust. Among venture capital firms, the funding is there to support startups. Meanwhile, the rate of drug development has increased. In 2000, there were 2,000 Phase 2 and Phase 3 clinical trials happening throughout the country; a decade later, only 3,000 were occurring. This year, 12,000 trials are taking place.