Colliers Mid-Atlantic Life Sciences Market Outlook for 2026

Leasing Trends | Vacancy | Investment Activity

The Mid-Atlantic life sciences and healthcare real estate sector is navigating a period of recalibration, as shifting capital markets, slower venture funding, and evolving tenant demand reshape leasing activity across key hubs including New Jersey, Philadelphia, and Suburban Maryland. While macroeconomic pressures have tempered expansion in the near term, the region’s deep talent pool, institutional anchors, and strategic location continue to support long-term growth and position it as a critical corridor for research, manufacturing, and innovation.

The challenging macroeconomic environment is weighing on tenant demand. In 2025, biotechnology companies were forced to contend with a variety of factors that impeded their ability to grow and lease space. These issues ranged from weak stock market valuations that forestalled IPOs for many companies to reduced access to venture capital funding. PitchBook data indicates that 2025 was tied for the second fewest US-based life sciences company IPOs over the last 35 years. More than $33 billion in venture capital volume was completed during the year. While healthy from a long-term historical perspective, this volume is 25% below the 2020 to 2022 average at the height of the market, and in recent quarters earlier-stage firms have not been landing funding rounds at the pace seen in prior years. For some companies, this has led to layoffs and other cost-saving measures. Space absorption has suffered as a result, with 2025 marking the second consecutive year in which the major market aggregate posted negative net absorption. As is the case across many corners of the CRE universe, overall investment activity in the life sciences sector is down.

Regionally, market performance varies across key Mid-Atlantic hubs.

New Jersey

New Jersey, an established hub for life sciences, boasts eight of the top 10 global biopharmaceutical companies. Occupiers favor its strategic position in the Northeast Corridor, with a robust transportation infrastructure, top-tier research universities, and a large, specialized workforce. The state has the highest density of scientists and engineers per square mile in the US and is ranked second nationally for its pharmaceutical manufacturing workforce. It also offers cost-effective and move-in-ready lab and biomanufacturing space through a growing inventory of high-quality facilities, including repurposed legacy pharmaceutical campuses.

Although fewer large-scale transactions took place in 2025 because some legacy pharmaceutical companies continued to shed jobs, overall demand for life sciences space remained positive. Legend Biotech signed a significant lease, taking 57,325 s/f at 77 Corporate Dr. in Bridgewater. And Portal Innovations, a life sciences incubator, agreed to occupy 30,000 s/f at the Helix development in downtown New Brunswick. Significant new occupancies were driven by ground-up construction, including Kenvue’s global headquarters in Summit, featuring a 100,000 s/f lab building, and the completion of Aurobindo Pharma’s 170,000 s/f manufacturing facility in East Windsor.

Life sciences vacancy grew more slowly in 2025, from 14.4% to 14.9%. Available lab space remains concentrated in just a few large blocks, including the NEST campus in Kenilworth, where the owners are launching a multimillion-dollar renovation. In 2026, vacancy could stabilize, while demand from emerging biotech firms may drive selective growth.

Philadelphia/Tri-State

The completion of three largely speculative, purpose-built facilities in Philadelphia was the main component in the market’s vacancy increase to 11.3%. Although leasing momentum for new, speculative construction continued to lag, and multiple resident companies cut their workforces, there were positive trends in the life sciences ecosystem in 2025.

Merck, GSK, and J&J Innovative Medicine are building or expanding existing complexes in Delaware and Pennsylvania. Almac completed the first phase of a major expansion of its Souderton facility. B. Braun (Allentown, PA), Apozeal (Bristol, PA), Piramal (Sellersville, PA), and PharmaBlock (West Chester, PA) are all modernizing and increasing production lines while creating more jobs.

The University of Pennsylvania and Children’s Hospital of Philadelphia significantly expanded their research footprints in Philadelphia, and the Coriell Institute for Medical Research is developing a 92,000 s/f lab innovation center in Camden, NJ.

Legend Biotech opened its cell therapy R&D center at Breakthrough Property’s new 2300 Market St. development. Breakthrough and Eli Lilly will also be launching Lilly Gateway Labs at this location.

Unfortunately, Spark/Roche, Minaris Advanced Therapies, Adaptimmune, Carisma Therapeutics, Century Therapeutics, Vifor/CSL Behring, and Passage Bio had layoffs. Exelixis and Arbutus Biopharma shut facilities, and Adare Pharm announced plans to close one of two R&D/ manufacturing locations in Philadelphia.

The outlook for 2026 is increasingly optimistic. On the supply side, all of the construction currently under way is build-to-suit. Projects for WuXi STA and Spark/Roche are scheduled for delivery, adding 1 million s/f of occupancy. Additionally, two transformative projects were announced early in the new year.

Eli Lilly will be investing over $3.5 billion in a new injectable medicine and device manufacturing facility in the Lehigh Valley, and Johnson & Johnson announced plans for a $1 billion cell therapy plant in Montgomery County. The State of Pennsylvania was instrumental in landing these projects through the new PA Permit Fast Track Program.

Suburban Maryland

The Suburban Maryland life sciences market slowed noticeably in 2025, largely from uncertainty about government contracting activity and instability in the capital markets since mid-2023. This hesitation has tempered leasing momentum across the region. However, despite the recent dip in federal engagement, the area continues to benefit from its strategic proximity to key agencies such as the Food and Drug Administration (FDA) in Silver Spring and the National Institutes of Health (NIH) in Bethesda. These institutions, coupled with the Shady Grove life sciences cluster, serve as anchors for innovation and remain critical to sustaining long-term demand and investment.

Adding to the region’s competitive edge is a highly educated workforce and relatively favorable labor costs, factors that consistently attract companies seeking stability and talent. No new development projects are underway. However, multiple projects remain planned or in development, and several property sales are in progress, with potential conversions anticipated as the market approaches 2026. A major shift, driven by GSK’s decision to vacate its Rockville R&D center upon lease expiration in 2026, will put more than 600,000 s/f of vacant space into the market. This will create significant opportunities for tenants seeking large contiguous blocks . Although vacancy rates have remained in the single digits, an uptick is expected as these spaces become available, signaling a period of transition and potential growth for the region. With multiple life sciences tenants known to be subleasing, downsizing, or vacating their facilities (for example, BioReliance will consolidate several of its operations into its new build-to-suit in 2026), backfill space will be a major factor contributing to additional softness in the near term .

Pittsburgh

Pittsburgh is rapidly strengthening its position as a hub for life sciences and advanced manufacturing, fueled by its world-class research institutions, its healthcare infrastructure, and an expanding array of biomanufacturing capabilities. Four recent developments underscore the region’s momentum and its ability to both attract significant investment and drive innovation.

Panther Life Sciences is expanding its presence in Pittsburgh after a successful collaboration with Pitt BioForge that advanced its Microarray Patch technology, which enables large-scale, cost-effective vaccine delivery without refrigeration. After completing a $51 million Series E round of financing to advance ST266, its biologic treatment for necrotizing enterocolitis in premature infants, Noveome Biotherapeutics sent a strong, long-term growth signal by leasing 41,000 s/f at RIDC O’Hara to expand its operations. Peptilogics secured $78 million to fund late-stage trials of its peptide-based drug designed to eliminate prosthetic joint infections and potentially reduce the need for multiple surgeries. Finally, building on regenerative medicine patents developed at the University of Pittsburgh’s McGowan Institute, ECM Therapeutics has raised $35 million to support FDA- approved clinical trials for a non-surgical treatment of anorectal fistulas.

These investments and facility expansions clearly demonstrate Pittsburgh’s thriving life sciences ecosystem, which combines cutting-edge research, advanced therapeutics, and an advantageous real estate climate. Together, they position the region for sustained growth in healthcare innovation and biomanufacturing.