Image courtesy of Elkus Manfredi Architects

As the life science market retreats in a challenging financing climate, Related Beal is making a long-term bet on an expanding lab cluster in South Boston.

The Boston developer plans a 97,000-square-foot life science near the L Street Station development, including an incubator component for life science startups.

The project would replace a 19,440-square-foot warehouse and storage yard on a 0.8-acre parcel at 6 Elkins St.

Designs by Elkus Manfredi Architects call for a 3-story building, including an 8,250-square-foot incubator and 4,400 square feet of retail/restaurant space, a tenant roof deck and 48 below-grade parking spaces.

The project is a partnership with Shaughnessy & Ahern Co., longtime owner of the property, according to a project notification form submitted this week to the Boston Planning & Development Agency.

Related Beal is expanding the life science cluster in the nearby Raymond L. Flynn Marine Park, including a 344,000-square-foot lab project at 22 Drydock Ave. that will be occupied by Vertex Pharmaceuticals. 

But demand for lab space in Greater Boston has retreated to well below pre-pandemic levels amid an increasingly challenging financing climate for industry expansion, according to a report released today by CBRE.

“While the construction pipeline has remained robust, the demand side of the market has seen a sharp slowdown from the 2022 peak as both private and public companies battle a difficult economic environment and record-high construction pricing,” CBRE researchers wrote in the first-quarter market report.

Tenants signed 850,000 square feet in deals during the first quarter, but sublease listings hit a 20-year high of 1.6 million square feet, CBRE reported.