With lab construction costs over $1,000 per square foot, developers need tenants with deep pockets iStock illustration.

A steep downturn in leasing preceded the end of Greater Boston’s life science building boom in 2022, but not before dozens of developers had received financing and broken ground on landscape-changing projects.

Fast-forward to 2025, and brokerage data paints a stark picture of the local lab space surplus. A record 17 million square feet of life science space is available in Greater Boston, including direct vacancies and sublease listings, Colliers reported. Another 1.6 million in speculative lab buildings are under construction, according to a Cushman & Wakefield report, nearly 90 percent of which is still available.

This unprecedented space glut has prompted widespread speculation about the fate of lab buildings, from vacant new towers in Boston and Somerville to older buildings nearing the end of their design life.

Some lab buildings will attract leases from tenants such as hospitals and health care system research groups that have similar requirements for building systems, local architects predict.

“It’s exactly what they’re looking for. To me, it’s the same or a very similar use, although there might be some tweaks,” said Cathy Bell, a principal at Boston-based architects NBBJ.

With construction costs nearing $1,000 per square foot reflecting their robust building systems, lab developments require the top-tier rents typical for life science leases to break even. And with their large floor plates, they translate poorly to one type of sought-after use, multifamily housing.

“You’ve got significant utilities, you’ve got significant mechanical systems, and significant plumbing. If you’re reverse-engineering a lab building into something else, you really end up having to dumb it down,” said Mark Sullivan, a partner with architects JZA+D. “You don’t need all of the HVAC systems, so you either disconnect it or remove it.”

At some sought-after addresses, office tenants could be in the mix. Hasbro’s recent sublease of over 264,000 square feet from Foundation Medicine at 400 Summer St. in Boston’s Seaport points to one path forward.

Older vacant lab buildings whose owners have more stable finances could be occupied by research and development companies outside the life science industry, which typically pay lower rents but would generate revenue.

But others will sit vacant, face foreclosure by lenders, or torn down to make way for uses that remain in demand, such as multifamily housing.

“Doing these projects is a big juggernaut. For the buildings that are already built or well under construction, it’s a difficult ship to turn around,” said Scott Payette, principal at Scott Payette Architects.

Developers that were counting on life science expansion now are considering tenants from other industries that demand big floor plates, higher floor-to-floor heights, heavy floor loads and generous power supplies.

“That’s absolutely the most logical move,” said Kevin Sheehan, co-founder and managing partner at Greatland Realty Partners. The Boston-based firm has completed office-to-lab conversions in Lexington and Weston in recent years and currently owns approximately 2 million square feet of office and lab space.

Sheehan sees potential for technical uses including assembly space, electronics, robotics and drone research occupying space once envisioned for biotech startups.

“It’s a natural transition in the base infrastructure. It may not all be necessary, but where we have shell space we can accommodate a different type of use,” he said.

Fully built-out lab space including casework is harder to convert for other uses, however.

“If it’s already built as a lab fitout, then it becomes harder, at least on a speculative basis. We’ve been reluctant to go and demolish built space, unless we have a lease commitment,” he said.

Boston hospital systems have bought and leased privately-developed life science buildings in areas such as the Longwood Medical Area and Fenway in recent years. Pictured is the Alexandria Center for Life Science on Park Drive. Photo courtesy of Alexandria Real Estate Equities

Sluggish Investment Climate Lingers

With high costs for redesign and construction retrofits, lab developers might prefer to wait out a recovery in life science leasing or attract office tenants. Lab leasing has increased in 2025, according to Cushman & Wakefield data, hitting nearly 96 percent of 2024’s totals by the mid-year point.

And asking rents have remained stable, even increasing slightly to $82.51 per square foot throughout Greater Boston.

But total leasing activity totaled just 1.2 million square feet during the first six months of the year, Cushman & Wakefield reported, indicating it would take seven years to fill all of the vacancies at the current leasing pace.

And venture capital investment, considered a key leading indicator of industry growth, remained sluggish. During the first half of 2025, local life science companies received just $3.3 billion in venture capital funding, the slowest two-quarter period since COVID, Colliers reported.

Hospitals Buy and Lease in Fenway, LMA

Hospital systems have accounted for some recent transaction activity at lab developments, and share many of the same building requirements, according to architects.

In 2023, Boston Children’s Hospital acquired nearly half of a new lab tower at 421 Park Drive in the Fenway from developers Alexandria Real Estate Equities and Samuels & Associates.

Dana-Farber Cancer Institute plans to expand wet lab and research space in the Fenway and Longwood Medical Area, according to 2024 institutional master plan. The hospital already leases space in the LMA and Fenway from several private lab developers including BioMed Realty, IQHQ and Beacon Capital Partners.

Steve Adams

But Trump administration cuts in National Institutes for Health funding, estimated at $464 million across Massachusetts this year, would affect many of the largest hospitals’ budgets and could shelve real estate expansion plans.

Lab developers’ options widen depending upon how little remaining debt they have on a property, giving them financial flexibility to entertain a wider range of options for adaptive reuse, said Victor Vizgaitis, a senior principal at architects Sasaki.

“There’s a whole category of medical office buildings where they have a need for some infrastructure, but it’s not quite as intense,” he said. “There is a definite need for that, particularly in Longwood. Not everybody is coming for an overnight stay.”

And with unprecedented competition for those tenants still in the market, landlords may be prompted to increase amenity spaces to differentiate their buildings, NBBJ’s Bell said. Experiential retail spaces such as indoor golf courses and racing simulators already have leased space in the Seaport and downtown Boston in recent years.

“The market is competitive to grab these tenants,” Bell said. “We are working with a number of developers and landlords upgrading amenities in these spaces, so they might be putting in a conference center or upscale fitness with plunge pools, because they know that those amenities are going to attract tenants.”