Los Angeles Life Sciences Market Defies National Declines

The Los Angeles life sciences sector is standing out as a bright spot in a challenging national market. In 2024, tight supply and robust tenant demand have driven rental growth in the region, bucking the downward trend seen in other major U.S. life science clusters.

Market Performance Overview

According to JLL’s Life Sciences Real Estate Perspective and Cluster Analysis report, rents in the Los Angeles and Orange County markets grew by 6% in the first half of 2024. This performance contrasts sharply with the national landscape, where rents have declined by 9%, led by downturns in established hubs like Boston (-8.2%), San Diego (-4.7%), and San Francisco (-1.9%).

Patrick Church, managing director of JLL and head of the Los Angeles life sciences practice group, attributes this growth to a significant supply-demand imbalance. “Other markets have had their challenges. We’re the exact opposite because we have a significant supply imbalance. We’re working to bring developers into the city to address this gap,” Church said.

Supply and Demand Dynamics

The greater Los Angeles region, including Orange County, has an availability rate of just 3% for life sciences space, equating to approximately 306,000 square feet. This is a stark contrast to availability rates exceeding 30% in Boston and San Francisco and 26% in San Diego.

Tenant demand remains high in Los Angeles, with over 1 million square feet of active requirements from life science firms. Smaller firms, seeking spaces between 5,000 and 15,000 square feet, are particularly driving this demand.

Despite national headwinds such as reduced venture funding and higher interest rates, the Los Angeles market has demonstrated resilience. While tenants returned 158,000 square feet more than they leased in the first half of 2024, the region still recorded 300,000 square feet of leasing activity during this period.

Lack of New Construction

Los Angeles and Orange County currently have 12 million square feet of life sciences inventory, with no new construction underway. In comparison, Boston’s 49.5 million square feet represents six times its current demand, underscoring the supply pressure in Los Angeles.

One notable project on the horizon is UCLA’s conversion of the former Westside Pavilion mall into a 700,000-square-foot research hub. Scheduled to open in 2027, the facility will house the California Institute for Immunology and Immunotherapy, further enhancing the region’s research capabilities.

National Trends and Industry Insights

Across the U.S., life sciences landlords are grappling with elevated vacancy rates due to slowing demand, high interest rates, and a shift in research funding priorities post-pandemic. Availability rates have soared to 24% in San Francisco, 27% in Boston, and 17% in San Diego.

Landlords like Alexandria Real Estate Equities are responding by pivoting toward modern, amenity-rich campuses to attract tenants. These properties, which account for 70% of Alexandria’s annual rental revenue, are increasingly favored by life sciences firms.

Despite these challenges, the life sciences sector is poised for long-term growth. FDA approvals reached an all-time high last year, and biotechnology patent innovation increased by 22% compared to a decade ago. JLL predicts that potential interest rate reductions and increasing venture capital investments will bolster the market heading into 2025.

Conclusion

The Los Angeles life sciences market is defying national trends by capitalizing on tight supply, high demand, and strategic tenant engagement. While other markets contend with oversupply and falling rents, Los Angeles is leveraging its unique advantages to maintain growth and position itself as a key player in the life sciences landscape. As the region addresses its supply constraints, its prominence in the industry is likely to strengthen further.

Life Sciences Boom in Los Angeles: Why More Lab Space Is Essential

Los Angeles is emerging as a hotbed for the life sciences industry, with rapid growth in funding, talent, and innovation. Over the past five years, venture capital funding for life sciences in the region has surged by a staggering 566%, far outpacing the national average of 345%. Alongside this, Los Angeles boasts the second-highest number of biological and biomedical sciences graduates in the nation, fueling its ascent in the field.

A Thriving Ecosystem for Life Sciences

According to a national report by CBRE, the L.A.-Orange County region ranks seventh in the country for research talent. The area produces 4.5% of all biological and biomedical sciences PhDs in the U.S., thanks to powerhouse institutions like UCLA, UC Irvine, and USC. This academic infrastructure is a key driver of talent supply, enabling the region to house the fifth-largest pool of life sciences researchers nationwide.

Industry leaders attribute much of the region’s success to its diversity and entrepreneurial spirit. “Particularly over the past five years, this region has had some phenomenal success stories in the startup space,” says Jeff Pion, vice chairman at CBRE. Visionaries like Arie Belldegrun and Patrick Soon-Shiong have attracted significant venture capital and talent, while the local university system bolsters the pipeline of innovation.

The Talent Advantage

One of the distinguishing factors of the L.A. life sciences market is its robust talent pool. However, this strength is also a challenge. Unlike compact hubs such as San Diego or the Bay Area, L.A.’s talent is dispersed across a wide geographic area, making infrastructure and investment more critical.

Despite these challenges, the region’s life sciences sector has grown rapidly. From 2015 to 2020, Los Angeles achieved the fifth-highest growth rate in life sciences researchers, positioning it as a major contender in the industry.

The Push for Infrastructure

With demand for lab space on the rise, Los Angeles is facing a critical need to expand its infrastructure. Lab vacancy rates are tight nationwide, even with robust construction activity, and the life sciences sector’s unemployment rate is at a historic low — less than 1% as of April 2023.

“The quality and availability of labor are key considerations for any expanding industry,” notes Ian Anderson, CBRE’s head of life science and healthcare research. “Expanding life sciences companies can choose from dozens of U.S. markets depending on their labor and real estate needs.”

Beyond the Lab

The growth of life sciences isn’t limited to drug development. The industry is also expanding into personalized treatments, advanced materials, and even future foods, making Los Angeles a key player in addressing global challenges.

As the life sciences sector continues to flourish, Los Angeles has the potential to solidify its position as a leading hub — provided it invests in the necessary infrastructure and lab space to support this momentum. With venture capital flowing and talent thriving, the city is on the cusp of a breakthrough that could redefine its role in the global life sciences landscape.

Los Angeles experiences reduced life-science vacancies and more affordable rents compared to other major hubs.

While California’s life-science markets in the San Francisco Bay Area and San Diego grapple with an oversupply of lab space, Los Angeles stands out with its unique dynamics. According to CBRE’s second-quarter life-science report, L.A. is experiencing lower vacancy rates compared to other major metros.

Low Vacancy, Low Rents

Andrew Riley, an executive vice president with CBRE, highlights that L.A. isn’t overbuilt with lab space. However, the sector faces a lack of demand for the available supply, driven by economic conditions and companies focusing on cash conservation. This mismatch has kept life-science rents in L.A. relatively low, even in top submarkets. Compared to cities like San Francisco, San Diego, Seattle, Boston-Cambridge, New York City, and Denver-Boulder, Los Angeles boasts the lowest asking rent at $53.52 per square foot and the lowest vacancy rate at 9.6%.

Venture Capital Trends

Venture capital funding for L.A. life science fell from nearly $800 million in Q2 2023 to around $600 million last quarter. This decline has led to conservative real estate expansion plans among early-stage venture-backed companies, contributing to the low leasing rates.

Future Demand and Supply Dynamics

Riley notes that while life-science supply was a concern in the past, it has become less pressing over time. Currently, there is about half-a-million square feet of tenant demand, a figure Riley believes could easily double. Even a single tenant seeking significant lab space could shift supply dynamics considerably.

Submarket Opportunities

There are ample opportunities to lease lab space across various submarkets, including West Los Angeles, the Conejo Valley, Pasadena, and the South Bay. West L.A. and the Conejo Valley lead in asking rents, with West L.A. at $71.52 per square foot, the highest in Los Angeles, followed by the Conejo Valley at $59 per square foot, and San Gabriel Valley at $47.

Challenges and Investor Interest

West Los Angeles remains a prime area of interest for life-science tenants due to its proximity to UCLA and central location. However, real estate investors face challenges in providing life-science solutions due to competition from those looking to reposition assets for creative office space. The high price per square foot for land in West L.A. compared to Pasadena or the Conejo Valley adds to the difficulty.

Market Predictions

Riley predicts continued mergers and acquisitions as startups and growing companies ramp up their research and development efforts, leading to a deeper commitment to L.A. and expansion plans. He also hopes to see more incubator lab space across L.A., similar to BioLabs in Torrance, which offers both open space for startups and individual suites as dedicated lab space.

Los Angeles’ life-science market, with its unique blend of low vacancy rates and affordable rents, presents a compelling landscape for both tenants and investors navigating the evolving real estate dynamics.

402-408 E Huntington Dr

Foothill Technology Center at 402-408 E Huntington Dr is a three-building campus totaling approximately 254,032 RSF, built between 1985 and 1987. The campus includes the following buildings:

• 404-408 E. Huntington Dr.
• 555-605 E. Huntington Dr.
• 602-606 E. Huntington Dr.

The property offers ample surface and structured parking, with a convenient bridge over Huntington Drive for easy access. The parking ratio is 3.3/1000 SF.

11801 W Olympic Blvd

Located on the north side of Olympic between S. Barrington and Bundy Dr., 11801 W Olympic Blvd offers a prime location within walking distance to the Olympic/Bundy Metro Station. The available space is approximately 36,000 RSF with a clearing ceiling height of 18’+. Significant parking is available onsite, and the property is within walking distance of numerous restaurants.

1070 E 233rd St

1070 E 233rd St offers prime laboratory space within the Carson Industrial submarket. Located 15 miles south of L.A. in the South Bay area, Carson serves as a regional hub with access to four major freeways and ample public transportation. The area is also home to California State University Dominguez Hills and is approximately seven miles from both Redondo Beach and Long Beach Marina.

2 S Faraday

2 S Faraday is a tax-exempt religious facility offering additional spaces for lease. Currently, the fully furnished chapel, equipped with a Class A sound system, chairs, screen, and projectors, is available for shared lease. The chapel can accommodate over 100 people, with available time slots starting from 12:30 PM on Sundays.

Additionally, there is approximately 3,000+ sqft of open space available for lease, suitable for use as a community center, specialty school, dance studio, and more.

2882 Walnut Ave

Discover the potential of 2882 Walnut Ave, featuring multiple offices, a restroom, an open work area with lab space potential, and a warehouse. The landlord will provide standard flooring of the tenant’s choosing, with negotiable lease terms. This property offers heavy power (exact amperage to be confirmed), a great location facing Walnut Avenue, excellent freeway access, free surface parking, and a truck door.

914-924 N Formosa Ave

Situated near the intersection of Santa Monica Boulevard and La Brea Avenue, 914-924 N Formosa Ave offers a central location with easy on-site parking. This property is surrounded by a variety of amenities including Starbucks, Target, Mendocino Farms, BevMo, Best Buy, Rite-Aid, Smart & Final, Food Lab, Chipotle, and Pink’s Hot Dogs.

Located adjacent to Hollywood and near The Lot Studios and numerous production facilities, this space is perfect for industrial, flex, warehouse, office, and creative office use.

3673 N Industry Ave

Discover the perfect space for your business at 3673 N Industry Ave in Lakewood, CA. This versatile flex property offers a unique blend of office and industrial space, ideal for a variety of business needs. Located in the bustling Airport Business Center, this property provides excellent accessibility and visibility.

Key Features:

Location: Situated at 3673 N Industry Ave, Lakewood, CA 90712, within the well-known Airport Business Center.

Space: Flexible layout suitable for office, warehouse, or light industrial use.

Accessibility: Convenient access to major highways and public transportation.

Amenities: Modern facilities with ample parking, high-speed internet, and on-site  management.

Whether you’re looking to expand your operations or establish a new presence in Lakewood, 3673 N Industry Ave offers the ideal setting to grow your business. Contact Surf Management, Inc. for more information and to schedule a viewing.

27699 Jefferson Avenue

27699 Jefferson Avenue Tenants have the opportunity to request space improvements, such as renewing carpets, replacing carpeted floors with hardwood, and painting the suite. The listing broker has a budget of up to $19,000 available for these improvements. Additionally, the space has annual rent escalations of 3% each April.

41715 Winchester Rd

Discover the perfect medical or dental office space at 41715 Winchester Rd. This beautiful two-story building, located on busy Winchester Road, currently offers five available suites. Three suites come with completed medical build-outs, while two are ready for medical or office build-outs.

Join a great mix of medical tenants in this well-kept and easily accessible property, just off the I-15 freeway in the heart of Temecula. The property is surrounded by numerous restaurants and shopping centers, making it a convenient location for both staff and patients.

Don’t miss out on this opportunity at 41715 Winchester Rd!

36310 & 36320 Inland Valley Drive

36310 & 36320 Inland Valley Drive conveniently located off Clinton Keith Road and Interstate 15 in Wildomar, Southwest Riverside County, 36310 & 36320 Inland Valley Drive features two 3-story Class “A” medical buildings, each offering 30,000 square feet of space. These buildings are dedicated exclusively to medical use, housing urgent care, primary care, labs, and practice groups specializing in pediatrics, cardiology, general practice, and more.

160 N Luring Drive

160 N Luring Dr offers meticulously maintained office space with covered parking on the ground level and office suites directly above. The building features both an elevator and stairs for easy access. Each suite includes private restrooms and offers views from all angles.

The owner is extremely motivated, offering reasonable rents with no NNN/CAM expenses. Improvements can be made to meet specific requirements. Lease terms are very negotiable, and the space is available for immediate occupancy!

Location: Situated on the east side of N. Luring Drive, between Tahquitz Canyon Way and Andreas Road, near the intersection of Sunrise Way and Tahquitz Canyon Way.

73-345 Highway 111

This space at 73-345 Highway 111 is perfect for a medical office user! Situated on the historic Highway 111, the main traffic corridor through the Coachella Valley, Southwest Plaza is adjacent to the renowned El Paseo shopping district. El Paseo is the premier destination in Palm Desert, featuring upscale restaurants and retailers such as Louis Vuitton, Escada, and many more.

Become part of Southwest Plaza, a distinguished office complex known for its unique fountain and sculpture feature, creating a professional and attractive environment. Amenities include highly visible signage on Highway 111, with a traffic count of approximately 44,000 vehicles per day, an elevator, and a newly refurbished exterior.

960 E Green St

960 E Green St offers doctors, medical professionals, and their patients a fully supported medical center environment in an iconic building. The property features meticulously landscaped courtyards, wood-paneled common areas, and first-class amenities. Conveniently located within walking distance of over 700 restaurants and retailers, this premier medical office building is situated in Pasadena’s South Lake Avenue District.

15295 Alton Pky

15295 Alton Pky in Irvine, a richly landscaped 19-building office and R&D campus offering 216,000 sq. ft. of premium space. This campus features new outdoor workspaces designed for meeting, collaborating, and socializing, bringing the best of coastal California to your workplace. Enjoy resort-style living at nearby apartments such as The Village, The Park, Centerpoint, Westview, or Los Olivos.

15295 Alton Pky boasts bold project signage and highly visible wayfinding and building signage opportunities, elevating your business’s exposure at this prominent intersection. With easy access to over 250 top restaurants and specialty retail stores at Irvine Spectrum Center®, Sand Canyon Plaza, and Oak Creek Shopping Center, this location is ideal for both work and leisure. Conveniently located near the 1-5, 1-405, and 133 Freeways, as well as the 241 Toll Road, 15295 Alton Pky offers unparalleled accessibility for your business needs.

145 N Sierra Madre Blvd

145 N Sierra Madre Blvd, located in the vibrant city of Pasadena. This property offers an 18’ clearance and is fully air-conditioned, providing a comfortable and spacious environment for your business operations. Each unit comes with three unreserved parking spaces free of charge, ensuring convenient access for you and your clients.

At 145 N Sierra Madre Blvd, tenants are responsible for their own utilities, interior janitorial services, and CAM charges of $0.15 per sq. ft. The property features a kitchenette, a 10’ x 10’ loading door with roll-up door potential, and a bathroom, making it a versatile space suitable for various business needs. Don’t miss the opportunity to establish your business in this prime Pasadena location.

17661 Cowan

17661 Cowan, a multi-tenant office building centrally located in the heart of Irvine IBC. This prime location offers easy access to the 5, 55, and 405 Freeways, and is in close proximity to Orange County John Wayne Airport. With retail and dining amenities nearby, 17661 Cowan provides convenience and accessibility for all your business needs.

This versatile flex space can accommodate both office and laboratory requirements. It features existing R&D/lab areas and heavy power capabilities, making it suitable for a wide variety of business operations. Tenants will also benefit from the prominent identity and frontage on Red Hill Ave, as well as a warehouse with ground level loading access. 17661 Cowan is the ideal location for businesses looking to thrive in Irvine.

1325 E El Segundo Blvd

1325 E El Segundo Blvd, a versatile property offering a range of suites to meet diverse business needs. Suite C features a warehouse, built-out laboratory, R&D office, and a commercial kitchen, each equipped with 11’x10’ roll-up doors and ceiling heights ranging from 10′ to 18′. Suite D is a ghost kitchen with a Type I Captiveaire 12’ wide hood, grill, fryer, griddle, and includes a 50 sq ft walk-in cooler and freezer. Suite E provides a dedicated office space.

1325 E El Segundo Blvd is powered by a robust 2,000 Amp / 480 V / 3 Ø electrical system, with infrastructure in place to double the kVA capacity. The building boasts 140 tons of total cooling capacity through its HVAC system, ensuring a comfortable environment throughout. Additional utilities include a reverse osmosis water filtration skid, commercial refrigerators, a 160-gallon hot water heater, an industrial boiler, and a fully sprinkled building. This property is designed to support a wide range of industrial and commercial activities.

18 Technology Dr

18 Technology Dr, located in the prestigious Irvine Company Technology Plaza. This high-image industrial unit offers a total of ±5,038 SF, including ±3,038 SF of office area and ±2,000 SF of warehouse space. The warehouse boasts a 16’ clear height and is equipped with one ground level loading door, making it ideal for various industrial needs.

18 Technology Dr features 12 drive-in bays and 36 standard parking spaces, ensuring ample convenience for both employees and visitors. The lease term extends through April 30, 2026, and includes furniture, providing a turnkey solution for your business. Don’t miss out on this prime opportunity to establish your operations in Irvine’s thriving business environment.

425 E Huntington Dr

The available space at 425 E. Huntington Drive in Monrovia is located on the first floor and includes Rooms 02, 03, 04, 05, 06, 07, 08, 09, 11, 21, 23, 26, 33, 34, and E2, totaling approximately 5,000 SF. The lobby, Room 11, and office Room 21 feature exterior glass windows facing south toward Huntington Drive. While most rooms lack exterior windows, Rooms 06, 07, and 08 are currently subdivided into smaller rooms by lab walls, which can be reconfigured if needed. Shared restrooms in Rooms 45 and 47 are almost always available, as the upstairs tenant has their own facilities.

The second floor of 425 E. Huntington Drive includes shared spaces such as Room 138 (kitchen), Room 148 (conference room), and Room 147 (bathroom with shower). Access to these rooms is via internal stairs, as there is no elevator. The building houses other tenants, including Primordium Labs and Tanner Research on the first floor, and Hierarchy Builders on the second floor. The property shares 96 unrestricted parking spots and has an alley for deliveries, though there are no truck-height docks. The monthly rent is $10,024, approximately $1.79 per rentable SF, with no extra charges for ventilation and drainage, except for electricity. Tenants must comply with all relevant regulations.

41 S Chester Ave

41 S Chester Ave, a prime location just a few blocks from Cal Tech, Pasadena City College, and Old Town Pasadena. This versatile property offers the possibility for a wet lab, making it an ideal choice for laboratories. With high ceilings and a machine shop on the premises, 41 S Chester Ave is also perfect for creative, artistic, or office spaces.

The property is surrounded by numerous restaurants within walking distance and is conveniently close to the freeway, enhancing its accessibility. Whether you’re looking to build out the space to suit your specific needs or take advantage of its existing features, 41 S Chester Ave provides an excellent opportunity for a variety of uses. Don’t miss out on this exceptional location!

23322 Madero

23322 Madero, Mission Viejo Commerce Park is a light industrial complex featuring nine single-story buildings with a total area of 145,937 square feet. The property provides ample parking, high-speed internet, private restrooms, and 16-foot high truck doors. Conveniently situated less than four miles from the I-5 freeway, Mission Viejo Commerce Park is also close to numerous restaurants and retail centers.

5 Holland suite 209

5 Holland suite 209, Irvine – a versatile ±6,125 SF Lab/Office/Warehouse space designed to meet a variety of business needs. This property features a spacious ±1,894 SF single-story office and an expansive ±4,231 SF lab space, which can be converted into warehouse space if required. The facility includes cleanrooms and a gowning room, ensuring a controlled environment for specialized operations. With a 16 ft warehouse clearance and one ground level loading door, the property is well-equipped for efficient logistics and storage.

The property at 5 Holland suite 209 boasts a 400-amp electrical capacity and a convenient 2:1,000 parking ratio, making it ideal for both office and industrial use. A full interior renovation was completed in 2021, ensuring modern and updated facilities. The sublease term extends through October 31, 2026, offering a flexible leasing option for businesses looking to establish or expand their operations in Irvine. Don’t miss the opportunity to secure this prime location for your business needs.

440 S Hindry Ave

440 S Hindry Ave is Located in the heart of Inglewood, just minutes from LAX and Downtown Los Angeles, this versatile lab space offers an ideal environment for innovation and creativity. Nestled in a secure and vibrant business park, each unit boasts a unique storefront, creating a sense of individuality and identity. Spaces range from 2,200 to 4,500 square feet, with easy access through a ground-level 10′ x 11′ loading door, perfect for R&D, light manufacturing, and creative office needs.

Positioned less than five miles from the coast, this location combines convenience and opportunity, surrounded by four major freeways (I-405, I-105, I-110, and I-10) for simple commutes across the region. Public transportation is easily accessible, with Aviation Station just 2 miles away. LAX is a short 2.5-mile drive, and Long Beach Airport is 18.5 miles away, offering flexible travel options.

The surrounding area is rich with amenities, with three shopping centers within a mile and five parks within a 9-mile radius, including the serene Ballona Wetlands Ecological Reserve, Dockweiler State Beach, and Kenneth Hahn State Recreation Area, making it easy to blend work and play in a thriving, connected community.