The next phase of the life sciences real estate market may look different from what we have seen in recent years. Recent market data shows that while demand for laboratory spaces has decreased across many U.S. markets, demand for pharmaceutical manufacturing investment continues to increase.1 This trend may reflect the industry’s efforts to reduce pharmaceutical industry’s reliance on foreign manufacturers by increasing domestic manufacturing capacity.2
Development of pharmaceutical manufacturing will likely follow a different trajectory from what we observed with laboratory space. Laboratory space is often dependent upon venture capital funding and a speculative research timeline. In contrast, manufacturing facilities are tied to long-term operational requirements and FDA-regulated production activities already underway. Manufacturing investments therefore tend to involve larger capital commitments and longer occupancy periods tied directly to ongoing production and are unlikely to relocate in response to short-term market fluctuations.
This shift may create opportunities extending beyond traditional life sciences leasing. From a real estate vantage point, these manufacturing facilities require substantial utility infrastructure, specialized construction, environmental permission, transportation access, and long-term site control. As a result, future life sciences transactions may increasingly involve development partnerships, infrastructure commitments, entitlements negotiations, and regulatory compliance considerations rather than conventional laboratory leasing agreements.
With growing demand for clinical and research buildings, value may be found in properties capable of supporting biologics production, cell therapy operations, nuclear medicine production, and other advanced pharmaceutical operations necessary to pursue successful deliveries.
This article is a part of the 2026 Life Sciences Industry Report. Click here to read the full newsletter.
Footnotes
1: Tucker White, An Uneven Reset: U.S. Life Sciences Lab/R&D Leasing Lagged Pre-COVID Norms in 2025, Avison Young (Mar. 5, 2026), https://www.avisonyoung.us/w/us-life-sciences-lab-research-development-leasing-lags-pre-covid-norms-in-2025
2: Pharma Tariffs 2026: Supply Chain & Manufacturing Impacts, IntuitionLabs (May 23, 2026), https://intuitionlabs.ai/articles/pharma-tariffs-2026-supply-chain-onshoring
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]
