It may have been a spirit of "irrational exuberance" that sparked a surge of new construction and a flood of private investment in the life sciences following the Covid pandemic, but that surge is now being tempered by reality.

Former Fed chairman Alan Greenspan coined the phrase "irrational exuberance" to describe the risk of unduly escalated asset values during the dot-com bubble of the 1990s. A new report on office space by CommercialEdge suggests a similar pattern in the life sciences since 2020.

"It has become clear that developers over-responded to demand for lab space, leading to a supply glut in the sector," the report stated. "Breakthroughs in mRNA and CRISPR technologies, alongside record low interest rates, led to billions of dollars in funding from both private and public sources pouring into the life sciences sector. Developers rushed to respond, bringing millions of square feet to market in recent years through new developments and conversions of existing buildings."