Denver’s life sciences industry shows strength, even as the national market faces a slowdown. According to a new report from CBRE, Denver’s industry is one of the top-performing hotspots, driven by factors like solid funding and a growing demand for lab space.
While established life science hubs like Boston and San Francisco face challenges due to a funding slowdown and potential oversupply of lab space, Denver’s younger industry is still growing. This has made it an attractive market for companies, developers, and investors.
Funding on the Rise
Despite a national drop in venture capital funding for the life sciences sector, Denver companies secured a record-breaking $800 million in funding in 2023. This is a testament to the quality of science in the Denver market and its position for continued growth.
Demand for Lab Space Remains High
The demand for lab space in Denver is also on the rise. Fourteen companies sought over half a million square feet of lab space at the end of 2023. Additionally, Denver has the second-lowest vacancy rate for lab space among major markets, indicating strong demand despite an increase in new construction.
Speculative Development Taking Root
The rise of speculative lab development, where facilities are built without a specific tenant in mind, is another sign of confidence in the Denver market. This trend, practically nonexistent five years ago, highlights the growing interest from developers and investors.
Looking Ahead
While the national life sciences industry is expected to face some challenges in 2024, Denver is starting the year in a strong position. With emerging positive signs, cautious optimism exists for continued growth in the Mile High City’s life sciences sector.