Coupled with strong capital flows, life sciences companies have increased their footprint in most markets, driving up rents and increasing occupancies. With over 46 msf of lab inventory, the San Francisco Bay Area continues to experience aggressive industry expansion by its occupancy base. 

From early-stage startups through the largest life sciences companies, demand has outpaced existing supply in most Bay Area markets two-to-one, creating a continually landlord-favorable market. During the last six years, developers have delivered 7.9 million square feet (msf). There is an additional 2.9 msf under construction and more than 16 msf in various stages of planning. Current and planned construction has been dominated by speculative projects — both ground-up and conversions from office.

Biotechnology and pharmaceuticals represent most of the life sciences leasing activity in the San Francisco Bay Area, though the medical device and health tech sectors are extremely active as well. Vacancy currently sits at 10.87% with an average price per square foot of $68.16.

Nationally, life sciences employment has continued to fare better than the U.S. job market with year-over-year growth up 7.9% and 11.4% in 2020 and 2021, respectively. Since 2011, total U.S. employment growth has averaged 1.0% per year while life sciences employment has increased by 6.6% per year, on average. Since 2001, the San Francisco Bay Area has experienced a 222% increase in life sciences employment, with the employment and talent pool reaching 63,000 current and potential employees.

The region’s highly educated workforce, reinforced by its proximity to elite research institutions such as UCSF, Stanford and UC Berkeley, has made the Bay Area one of the most elite and active life sciences clusters in the world.