The pandemic-era surge in the Bay Area life science market has finally come back down to Earth, with net absorption registering negative 501K SF in Q1 2023 as near-record new supply pushed vacancies up 190 basis points to end the first quarter at 8.2%.
"Rising interest rates and economic uncertainty have slowed both demand and capital infusion as the market continues to recalibrate," Transwestern said, in a Q1 2023 market report.
As vacancy jumped from both softer deal activity and new product on the market, average rent growth declined considerably, falling 22.3% on a quarterly basis and 28.9% on an annual basis to finish the quarter at $4.10 per SF monthly (NNN).
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