Billions of dollars flowing into real estate for science firms

Demand for life science space has kept the sector’s performance strong this year, with lab space trading at high prices and developers rushing to add more in markets where life science firms cluster, according to Yardi Matrix Office Monthly. Even the tertiary cluster markets are growing.

Life science properties command high sale prices. According to Yardi Matrix, the average sale price of a life science facility in 2022 is $645 per square foot, 150 percent higher than the overall average of $258 for general office buildings. Buildings that are candidates for conversion into lab space can command higher prices, too. DivcoWest bought the 138,400-square-foot 5000 Shoreline Court in South San Francisco for $164.5 million ($1,188 per foot) and immediately began converting the building into lab space

The average full-service equivalent listing rate was $38.70 per square foot, a decrease of 0.1 percent year-over-year. The national vacancy rate was 14.8 percent for