Broader industrial market in Silicon Valley reveals a dichotomy between two product types

The San Francisco Bay Area's life science industry experienced a rise in vacancy rates, reflecting a recent decrease in venture capital funding for the sector
  • VC funding for Bay Area life sciences barely surpasses half a billion for Q4, marking a significant drop from the robust funding levels observed during the life science boom of 2020 to mid-2022 when quarterly funding regularly exceeded $2 billion.
  • As we navigate the post-pandemic landscape and enter a higher-interest environment, the allure of volatile biopharmaceutical investments has waned. Coupled with the surge in the headline-making AI industry, it comes as no surprise that investors are currently diverted from the life science sector.
  • Confronting financial challenges, an increasing number of life science companies are opting to sublease their spaces, contributing to a steady rise in the vacancy of life science spaces since 2022. With over 7 million square feet currently under construction, much of it due in 2024-2025, the life science market will likely face a vacancy issue. Landlords seeking to remain competitive will need to employ creative strategies, offering enticing amenities and concessions to attract prospective tenants.

Get market intel