SAN FRANCISCO—A wave of new supply—including conversions as well as ground-up development—is outpacing demand in the Bay Area's life science sector, pushing the vacancy rate for Q1 2024 up over 20%.
The leasing market slowdown in the Bay Area continued in the first quarter, with gross leasing activity totaling just 394,000 SF for the entire region, a tick down from the previous quarter and 41% below the 10-year quarterly average.
Net absorption for life science space remained in negative territory, totaling minus 648K SF, according to a new market report from CBRE. The overall vacancy rate in the Bay Area reached 20.4% in Q1. The life science vacancy rate in the San Francisco Peninsula submarket hit 22.2%, up 460 bps from the fourth quarter.
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