Despite a challenging 2024 for Boston’s life sciences market—marked by softening fundamentals and an oversupply of lab space—the city’s long-term investment appeal remains strong.
Boston has consistently led the nation in life sciences, a position reaffirmed in Colliers’ 2025 outlook, which ranked the city first in its Z-Score market rankings. These rankings consider factors such as venture capital investment, NIH funding, workforce strength, and both inventory and demand. Boston outperformed other major hubs, with the San Francisco Bay Area and San Diego following in second and third place, respectively64.
In specific categories, Boston led the nation in NIH funding in 2024, securing $3.46 billion—well ahead of New York City ($2.8 billion) and the Bay Area ($2.1 billion)11. For venture capital, Boston ranked second with $7.5–$8.4 billion, just behind the Bay Area’s $9 billion.
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Also, Beantown hosts the largest life science workforce in the country, with 53,000 workers. The San Francisco Bay Area was second with 39,000 and Philadelphia was third, with 25,300.
For rents, Boston is tied with NYC for the top spot in average rents per square foot NNN, at $101. The next closest is in the Bay Area, at $84 per square foot.
Additionally, Beantown was listed by Colliers as a leader in construction, with 4.7 million square feet in the works in 2024.
"These factors help the market to capture an outsized share of the nation’s life sciences-related leasing and CRE investor interest," Colliers wrote.
"Over the past decade, CRE space occupied by life sciences companies here has grown by 19 million SF (84%)."
Boston and the Bay Area are tied for the lead in new life sciences company formations, at 18 percent a piece.
Boston is home to some of the biggest biotech players in the country including Moderna, Biogen, Boston Scientific, Vertex and Thermo Fisher Scientific.
However, the city has been dealing with a demand problem, leading to millions of square feet of vacant deliveries, according to Colliers. A separate report from Colliers noted that the market's availability rate of 26.9 percent in 2024 marked a record high and represented one of the highest levels in the nation. This trend isn't expected to get much better this year.
"Demand has fallen significantly from peak levels due to macroeconomic conditions," said Colliers.
"This trend caused vacancies to hit a record-high level in 2024 and will likely contribute to rising available space in 2025."
To add to the misfortune, a recent report from Savills noted that the federal funding cuts could cause research institutions to scale back and startups to shut down or slow operations. New York State is expected to lose roughly $880 million in NIH funding. The exact impact on Boston is unclear, but it's a major recipient of this type of allocation. So there might be some concern. However, it's important to note that the Massachusetts legislature last year did approve a $500 million future incentive package that backs life science firms making investments in the state, as pointed out by Colliers.
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