Lab Space Just Hit Bottom — But Only the Best Buildings Get Saved

➤ The Signal

• The sector bottomed — but “bottom” is not “uniform.”

• Capital and tenants are concentrating in new, top-tier, primary-market assets.

• Secondary markets and aging buildings are being left behind.

After four years of oversupply, the trend finally reversed: availability is shrinking and demand in the core clusters is surging. That is a genuine inflection — the first one biotech real estate has seen since the 2021 peak unwound.

But the recovery is bifurcated, and the split is the story. Demand is rushing into post-2020, primary-market product while pre-2000 buildings keep bleeding space. Tenants with unprecedented leverage are trading up — same rent dollars, far better real estate.

For owners, vintage is now destiny. A 1990s lab in a secondary cluster is not “early-cycle upside” — it is the supply the recovery is structurally bypassing. Basis discipline and building quality decide who participates.

➤ Implications

Expect rents to firm first in Boston, the Bay and San Diego’s newest assets, while concessions persist elsewhere. Conversion or repositioning — not patience — is the play for obsolete lab stock.