Record-high employment, surging venture capital funding and increasing demand for lab space are defining the life sciences real estate market at the halfway point of the year, according to a new report from CBRE, which paints a picture of an industry skyrocketing out of the depths of the coronavirus pandemic, noting that “capital is plentiful for expansion” as the overall economy continues to rebound.

Today’s unprecedented growth is likely to accelerate further, CBRE researchers wrote. Employment in the sector reached an all-time high this year, with 16% growth since 2017, a velocity besting the tech sector. Venture capital funding hit a quarterly record of $10B, double that from Q1 of 2020.

Emerging and second-tier markets, as well as biomanufacturing, have shown particular strength; Seattle alone has seen a 266% jump in annual funding through Q1 2021. Longtime hubs San Diego, Boston and the Bay Area continue to boom, with year-over-year venture capital funding in those regions up 192%, 156% and 24%, respectively.

New York City narrowed its funding gap with Boston to just $22M in 2020, down from $367M in 2016, and has nearly 2M SF of lab and research space under construction, the most outside the big three markets.

Rents across the country's top markets have shot up 10% or more in the last year, and in Philadelphia, rent leaped nearly 40%.

This growth has created a space shortage expected to drive development in the long term and more conversions in the near term, with demand growing 34% across all major markets in the last year alone. The 15.6M SF of spec construction underway nationally as of Q1 2021 won’t meet demand, CBRE predicts, and pre-leasing of this space jumped from 22% to 29% over the past 12 months.

This report comes on the heels of a number of federal initiatives and potential investments that may further stoke the sector’s growth, including Biden administration proposals to significantly increase National Institutes of Health funding (which already grew 37% between 2015 and 2020) and a series of innovation and competition acts recently passed by Congress that might create new research hubs.