Philip Borden
Between 2019 and 2022, biotech entered a gold rush. In 2021 alone, venture investors poured $49.7 billion into life science companies, driving lab vacancy rates in leading biotech hubs like Cambridge and the Bay Area toward effectively zero and pushing rents into the triple digits per square foot. In the scramble for space, many boards signed five- to 10-year leases for far more lab than they needed, often at peak pricing, simply to secure any footprint at all.
Life science-focused developers followed the money. Confident that desperate tenants would pay almost anything, they embarked on an unprecedented building spree. What they built, in many cases, were cathedrals: oversized, expensive labs designed for uninterrupted, linear growth.
But biotech is cyclical. Funding cycles swing. Programs stall. In the rush to secure space, companies locked themselves into fixed, high-cost leases, violating two basic rules of biotech: Stay capital efficient and remain flexible.
Fast-forward to 2026, and many of these cathedrals now sit half-empty, burning cash and gathering dust. Developers struggle to find tenants, while companies find themselves stuck in oversized leases that no longer match their science or headcount. The cathedral model has broken down.
High Rents Not Only Problem
The visible problem is vacancy. The less visible problem is the total cost of these buildings. Rent is one element of the expense, but it’s typically only 30 to 40 percent of the total operating cost. On top of base rent come utilities, taxes, building fees, equipment, back-end lab operations, staffing, safety and regulatory compliance, maintenance and more. Lab space listed at $75 per square foot can easily cost two to three times more once you account for all of these costs.
Those costs have consequences. Over the past year, a quiet but growing number of emerging biotechs have shelved promising discovery programs and delayed key hires, not because the science failed, but because they over-committed to lab infrastructure.
Meanwhile, deep structural shifts are reshaping the demand for lab space. AI-enabled discovery and advanced digital tools allow companies to do more with fewer scientists and less lab space. Research that once required large in-house labs is increasingly outsourced to specialized partners. Meanwhile, uncertainty out of Washington, from NIH funding pressures to unpredictable FDA and HHS policy shifts, has made long-term planning more difficult.
In this environment, oversize, inflexible lab space has become not just a liability, but a boat anchor for emerging biotechs. Even three- to five-year lab leases lock companies into fixed capacity at a time when agility matters most.
What’s needed now is lab infrastructure that scales with the science, rather than trying to anticipate it five or 10 years in advance. Shared labs are one alternative to the cathedral model.
Why Shared Space Is Next Wave
Once dismissed as short-term incubator space, today’s shared facilities can offer private lab suites, access to high-end equipment, and centralized management of safety, permitting, calibration, maintenance and other complex operational tasks. They let companies expand or contract without forcing leadership teams to take on the cost and complexity of running a facility.
For biotechs with fewer than 30 scientists, traditional lab leases too often turn into financial and operational constraints, forcing teams to spend more time managing buildings than advancing science. Shared labs are not a universal solution: BSL-3 work, highly bespoke automation and certain large-scale activities will always require dedicated facilities. But for many emerging biotechs building and advancing a pipeline, flexible models deliver more options at lower cost and with far less operational burden.
Don’t mistake life science real estate struggles for struggles of biotech. While news of lab vacancies garner headlines, the public biotech market indices are quietly up 100 percent from their April 2025 lows. Biotech M&A has accelerated, and the IPO window is cracking back open. Biotech moves in cycles; this one’s rebounding.
The question is whether biotech infrastructure strategy will catch up. The cathedral era is over. What replaces it determines if U.S. biotech stays the global leader or loses ground to leaner, more flexible rivals abroad like China.
Founders and boards must resist grand, inflexible leases that shorten runway. Investors should underwrite efficiency, not monuments. Brokers and developers should steer toward scalable infrastructure.
America did not become a biotech leader by building monuments. It did so by remaining pragmatic and relentlessly focused on scientific progress. To remain the epicenter of the life sciences world, we must move beyond cathedrals and embrace labs that serve biotech’s flexible, capital-efficient future.
Philip Borden is CEO of shared-lab space provider Labshares and former life sciences VC and PE investor at Frazier Healthcare and Riverside Partners.
