Of the 21.2 million square feet of lab and R&D space currently under construction, 72% remains unleased, following negative net absorption last year and into the first half or 2024. Activity in the sector picked up slightly during the second quarter, but developers have a long road ahead to fill their new buildings, according to CBRE's latest life sciences construction benchmarks and trends study.

Life science project costs have increased between 20% and 25% above pre-pandemic levels thanks in part to unique requirements including increased security, flexible design options, more plumbing, emergency power generators, increased HVAC and loading docks, among other amenities.

To meet exploding demand during the pandemic, some developers converted underutilized commercial spaces to lab/R&D use. That activity peaked at 35% in early 2022 and returned to a pre-pandemic level of 20% early this year. Conversions likely will continue to decline as construction starts slow and more space is delivered, said CBRE.