Biotech Faces 'Zombie Lab' Glut
Boston's biotech sector faces a paradox: millions of square feet of life-science lab space sit empty, creating a “zombie labs” phenomenon reports Boston Globe.
The oversupply stems from a surge in lab space construction during the COVID-19 pandemic, fueled by low interest rates and a pivot from struggling office properties. Developers rushed to meet the perceived demand, resulting in a glut of specialized buildings ill-suited for other uses. Vacancy rates in Boston's lab market have soared, reaching as high as 30% in early 2025. This contrasts sharply with the single-digit vacancy rates of previous years, and far exceeds the vacancy rate for traditional office space. The situation is further complicated by biotech firms facing headwinds such as tighter venture capital, lower company valuations, and FDA process disruptions. These factors have led to staff reductions and a decrease in demand for lab space. Despite the current downturn, some are optimistic about a turnaround, pointing to recent large leases by companies like Lila Sciences and Eli Lilly. Others believe the sector will recalibrate, requiring strategic adaptation from both tenants and landlords.
