When a "blip" is measured in billions of dollars, it's safe to say an industry has matured.

JLL’s recent life sciences report finds that the sector, significantly slowed down from the heady fundraising days of late 2020 and early 2021, is still seeing significant capital and investment, staying afloat amid the swirling uncertainty across VC markets and the larger economy.

While JLL researchers note this is a blip, the temporary bump is making an impact on real estate markets. Tenant demand for lab space has dropped by one-third, or 7.2M SF, in the nation’s top five markets year-over-year.

Even though VC funding, at $21B through the end of August, has sunk 38% below its most recent peak, it is still on pace to be one of the highest years of funding on record. Private funds such as Atlas Venture, Third Rock Ventures, 5AM Ventures and Andreessen Horowitz have raised nearly $4B combined this year.

Only 20 firms have gone public this year, however, reflecting broader pessimism about the public markets. The reaction from many biotech startups is expected to be subleasing excess real estate, reduced headcount and courting of Big Pharma firms for potential mergers.

Without a turnaround in venture funding, the report suggests little likelihood of a pickup, and perhaps even an increase in available Class-A and B lab space, which would provide move-in ready space for cash-strapped firms requiring little or no capital expenditure spending.

But the last year’s drop-off isn’t predicted to last. JLL sees secular trends in funding and research, including an aging population, a 10% boost in R&D spending in the last five years, and the new promise of technologies like personalized and regenerative medicine, as long-term signs of continued growth and real estate investment.

What may be more surprising is where JLL predicts the growth will occur. The firm’s new cluster market analysis didn’t have many surprises in the top rankings, but it placed Salt Lake City, Pittsburgh and Minneapolis-St. Paul as the ninth, 10th and 11th best markets in the nation, respectively. Each of these cities was touted for their exceptional universities and talent, ranking above touted emerging cities such as Houston and and Denver.