Boston’s Lab Development Sites Stall Amid Market Struggles
Greater Boston currently has more than 10 million square feet of planned lab construction sites that remain unbuilt, primarily due to high vacancy rates in the life sciences sector. As these vacancies continue to climb, developers say they’re facing a market that won’t support them, and dozens of these projects have stalled.
In an interview with BisNow, Colliers Research Director Jeff Myers said, “A lot of those projects did move forward and are either completed or will be completed soon, but millions and millions and millions of square feet of that didn’t really materialize.”
According to BisNow, at the end of the fourth quarter of 2024, the Greater Boston life sciences availability rate surged to 26.9%. At that point, more than 15 million square feet of space was available across Greater Boston. Data provided by Cushman & Wakefield reveals that 29 lab projects in the Boston area that have been permitted or proposed haven’t broken ground. All but one of these lab projects was planned as a speculative build.
Boston’s Seaport District has 12 unbuilt lab projects, followed by Cambridge with five. The Urban Ring submarket, which covers Boston and its inner suburbs outside the major lab clusters, has nine.
According to the BisNow report, developers acquired many of these properties during the height of the lab boom. Companies spent millions on sites they saw as prime lab spaces. When the lab market stalled, developments became harder to start.
During the first quarter of 2024, life sciences giants began selling properties where they planned to build labs for much less than they originally paid. Alexandria Real Estate Equities sold a three-story office building in Andover for $3.9 million, considerably less than its $14.3 million purchase price.
One city, Watertown, has stepped in to purchase properties no longer suitable for labs. Last month, for example, Watertown officials approved acquiring a development site at 148 Waltham St. for $9.2 million. The city is exploring options for the site, including affordable housing.
The future of many unbuilt lab sites remains uncertain. Some may still develop as labs if they secure major pre-leases. Others, however, could struggle if the market appetite for lab spaces doesn’t recover.