April 16, 2025
- NYC’s lab exclusive average asking rent climbed 9% year-over-year to $106.91 NNN per sq. ft.
- Total lab-exclusive inventory hit 2.89 million sq. ft. by year-end 2024, with potential to more than double by 2029.
- Major developments like the Science Park and Research Campus (SPARC) Kips Bay and proposed new life science building Innovation East gained City Council approval.
New York City’s life sciences sector is fast becoming a transformative force in the city’s commercial real estate landscape. Traditionally dominated by financial services and tech tenants, the city’s office market is now seeing a surge in demand for specialized lab space — the cornerstone of biotech and biomedical research operations. But with zoning laws and infrastructure limitations shaping availability, lab-ready properties have quickly become premium assets.
Despite a soft leasing year in 2024, momentum remains strong. Institutional support, renewed venture capital interest, and major public-private developments have laid the foundation for explosive growth. For landlords and investors, the opportunity to convert or develop lab-capable space is not just a trend — it’s a strategic shift.
Key Recent Trends & Tenants
The market in 2024 may have seen slower leasing velocity — down 60% from the prior year — but activity from high-impact players kept confidence high. New-to-market tenants like Chan Zuckerberg BioHub and expansion efforts by stalwarts like Mount Sinai at Hudson Research Center reflect enduring interest. NYU Langone and BioLabs’ move to Court Square West further energized NYC’s incubator scene, signaling strength in early-stage biotech.
Yet, much of NYC’s lab demand remains fragmented, driven primarily by small to mid-sized users, especially given tighter capital deployment across the industry. Still, key anchor institutions and the steady presence of venture capital-backed companies provide long-term stability in tenant mix.
Inventory & Asking Rent
Lab-exclusive inventory stood at 2.89 million square feet at the end of 2024, with the potential to exceed 6 million sq. ft. by 2029. This ambitious growth is bolstered by city-backed initiatives and private sector investment. The lab-exclusive availability rate dropped by 890 basis points year-over-year to 26.2%, while occupancy-ready lab space was even tighter at 9.4%.
Rents reflect this constrained supply. Asking rents rose to $106.91 NNN per sq. ft., up 9% from 2023, while Manhattan lab rents jumped 14% to $123.10. These rising numbers indicate investor confidence and the value placed on rare, lab-ready real estate.
Existing & Emerging Life Sciences Clusters
- Midtown West: The Hudson Research Center at 619 West 54th Street, now fully repositioned, continues to attract notable tenants like Hibercell and institutions like the New York Stem Cell Foundation.
- West Harlem: The Taystee Lab Building, a ground-up development, stands as a beacon for academic-industry partnerships, bolstered by significant public investment and developer commitment.
- Midtown South / East Side: The Alexandria Center remains a flagship, offering over 738,000 sq. ft. of prime lab space in a corridor rich with hospital and academic synergies.
- Brooklyn: Emerging clusters at SUNY Downstate and the Brooklyn Army Terminal cater to growing life sciences and manufacturing startups, with support from the NYCEDC and BioBAT initiatives.
2025 Outlook
Although 2024 ended with muted leasing activity and a conservative tenant approach, underlying indicators suggest a strong year ahead. Venture capital funding rebounded to $1.83 billion, and NIH grants held firm at $2.58 billion — both signaling continued research demand. With major zoning hurdles cleared for developments like SPARC Kips Bay and Innovation East, new inventory will start reshaping the market in 2025 and beyond.
In 2025, NYC’s life sciences commercial real estate market is poised for recalibration and acceleration. While large-scale leases may remain sporadic in the near term, steady absorption, climbing rents, and a maturing cluster ecosystem point toward robust growth — making this sector one of the city’s most dynamic real estate frontiers.
For the latest news, proven strategies, and exclusive opportunities in commercial real estate in New York City and Western Nassau County NY, the New York City Commercial Real Estate Advisors (NYCCREA) is your one-stop solution. Visit us at www.nyccrea.com
Reference:
New York City Life Sciences Market, CBRE
