The scale of the reversal
JLL published its 2026 US Lab Property Report on June 9, 2026. Lab vacancy in East Cambridge, Massachusetts — the densest concentration of life-science real estate in the country — stood at 32%, against a rate that held below 1% from 2019 through 2022.
Across JLL's three principal markets, Metro Boston, San Diego and the Bay Area, collective vacancy was also around 32%. The firm put the national supply-to-demand ratio at roughly six to one.
A move from effectively no vacancy to nearly a third of space empty in four years is among the sharpest reversals in any US property type this decade, and it is the product of a construction wave commissioned during the period when nothing was available.
Availability is falling, for two different reasons
JLL described the market as having reached a turning point. Lab availability fell by about 2 million square feet since mid-2025, including what the firm called the largest quarterly decline in a decade.
Part of that improvement is leasing, and part is reclassification: 6.2 million square feet transitioned out of lab inventory into other uses. Space converted to offices or industrial use leaves the lab vacancy calculation without a tenant ever signing a lab lease.
Analysis: both mechanisms genuinely reduce the overhang facing a lab landlord, but they mean different things for the sector. Leasing signals returning demand; reclassification signals owners concluding the demand will not return to those specific buildings. A reader tracking recovery should watch which of the two is doing more work in each subsequent quarter.
Old stock and new stock diverged
The improvement is concentrated in modern buildings. Properties completed since the start of 2020 shed 2.6 million square feet of availability over the nine months covered, while inventory built before 2000 added 700,000 square feet of availability back to the market over the same period.
Tenant composition is also shifting. Alternative users — artificial intelligence companies, robotics firms and what JLL terms 'tough tech' — accounted for 30% of Boston lab leases in 2025, roughly triple their share four years earlier.
That substitution helps fill buildings but changes what the buildings are. Space taken by a robotics company is not returned to the biotech pipeline, and if pharmaceutical demand recovers later, it competes for a smaller pool.
Scope and limits
JLL's coverage centres on Boston, San Diego and the Bay Area, which together hold the bulk of US lab inventory but not all of it. Conditions in the Research Triangle, Philadelphia or Seattle are not captured by the composite figure, and no single national lab vacancy rate across all US markets was stated in the report reviewed.
A separate JLL report published March 24, 2026 covers medical outpatient buildings, a different property type, and found occupancy at a record 92.7% with average rent growth of 3.3% year over year. That occupancy figure describes the fourth quarter of 2025 as reported in a March 2026 release; it is a comparison baseline rather than a 2026 reading, and it should not be conflated with the lab numbers.
The practical implication for developers is a long pause. With six square feet available for every square foot of demand, new speculative lab construction in the three core markets has no arithmetic supporting it until that ratio narrows considerably.