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CBRE
Figures
  | 
San Francisco Bay Area Life Sciences | Q4 2023

Life sciences market continues
to navigate economic challenges
CBRE RESEARCH
 | 
Q4 2023
18.1%
Vacancy Rate
(176K)
SF Net Absorption
7.9M
SF Under Const.
$6.07
NNN / Lease Rate
1.8M
SF of TIMs
Arrows indicate change from previous quarter.

Market Highlights:

  • At the close of Q4 2023, the total labor force in the San Francisco Bay Area (Bay Area) stood at 3.49 million with 3.59 million employed. The unemployment rate ended at 4.1%, up 90 basis points (bps) from the previous quarter. Life sciences companies continued to add headcount during the quarter, albeit at a lower level of 50 jobs, bringing the overall employment for the sector to 153,414.
     
  • The overall net absorption for Bay Area life sciences ended Q4 2023 at negative 176,000 sq. ft. Although still negative, occupancy declines have stabilized in Q4 2023 relative to the preceding three quarters.
     
  • Bay Area life sciences tenants in the market declined to 1.8 million sq. ft. in Q4 2023, as tenants continued to re-evaluate their real estate footprints given the recent slowdown in both venture capital funding and debt markets.
     
  • Despite the continued slowdown across the Bay Area, developers continued with new construction, as well as repurposing existing office to life science. In total, 40 projects were in development (ground-up construction and building conversions) at the end of Q4 2023, totaling 7.9 million sq. ft. 
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