TLDR:
- Life sciences venture capital funding surged in Q2 2024 after six months of stagnation.
- Leasing activity, absorption, vacancy rates, and construction pipelines in the Denver/Boulder area all saw positive trends in Q2.
In Q2 2024, life sciences venture capital funding experienced a significant rebound, reaching $65.9 million, which was 13.4% above the five-year quarterly average. In the Denver/Boulder area, leasing activity rose to 78,800 sq. ft., marking its highest total since Q4 2022 and a 61.1% increase from the previous quarter. Net absorption remained positive at 6,600 sq. ft., while direct vacancy inched higher to 10.2%. The construction pipeline saw minimal activity, with one new delivery and no new starts. Notable projects included BioMed Realty completing an additional 25,900 sq. ft. in Boulder.
Lease demand remained steady, with users requiring approximately 15,000 sq. ft. or less, and spec suites proving to be a popular option. The region also saw new lease demand concentrated in various projects. With a robust construction pipeline, vacancy rates are expected to continue a slight upward trajectory in the second half of 2024. Development activity in Q2 2024 saw minimal progress, with one completion and no new constructions. BioMed Realty is close to completing its new speculative building, with more speculative space set to be finished in Q3 2024.
The Denver/Boulder market has surpassed 4.5 million sq. ft. of life sciences inventory, with a majority of it located in lab space. The Northeast submarket had the highest vacancy rate at 34.4%, while Boulder and Northwest submarkets had the most new construction underway. Direct vacancy rates rose in Boulder and remained stable elsewhere. Overall, the region has seen positive trends in leasing activity, absorption, and VC funding in the life sciences sector.
