For the data behind the commentary, download the full Q2 2026 U.S. Life Sciences Report.
The life sciences sector continues to build momentum. Record M&A activity, a resurgent IPO market, and robust venture capital funding in the first half all point to stronger conditions. Real estate performance still lags, but sector fundamentals are gaining strength and will support future growth.Q2 2026 Life Sciences Key Trends
- After two consecutive quarters of positive absorption, net absorption turned negative in Q2, totaling -1.4 million square feet (msf). Despite this pullback, demand stayed resilient, with new leasing activity up 8% year-over-year (YOY) to 1.7 msf.
- Asking rents softened to $64.17 per square foot (psf), down 5.3% YOY. Rents are expected to face further downward pressure as the market continues to absorb excess supply and demand remains in the early stages of recovery. Overall vacancy rose 195 basis points (bps) YOY to 24.3%; though the pace of increases continues to slow. Sublease vacancy, meanwhile, declined 20 bps YOY to 3.4% as occupiers pulled space back off the market.
- No new deliveries were recorded in Q2 across the 12 markets tracked by Cushman & Wakefield Research—the first such quarter on record—reflecting a slowing development pipeline. Of the 4.5 msf of new deliveries expected in 2026, 72% is already preleased, underscoring the predominance of build-to-suit (BTS) projects.
- R&D property sales totaled $1.3 billion in Q2, down 24% YOY, as heightened uncertainty tempered the investment momentum seen earlier in the year. Still, pricing held firm, rising 7% YOY despite lower transaction volume.
- Venture capital funding rose to $9.2 billion in Q2, up 13% over Q1 and 52% YOY. While volumes improved, deal activity consolidated as investors concentrated capital into fewer, larger transactions, targeted at later-stage companies. Average deal size reached a record $21 million, nearly double YOY.
For the data behind the commentary, download the full Q2 2026 U.S. Life Sciences Report.
