Arena BioWorks was supposed to be a breath of fresh air for the Greater Boston life sciences market, but its bright bulb just went out.

Less than two years after launching, the billionaire-funded research institute abruptly closed its doors Tuesday, The Boston Globe reported.

It is unclear what will come of the company's 48K SF 399 Binney St. lease in Kendall Square, but the institution's closure is yet another hit for the struggling real estate market.

An Arena BioWorks spokesperson said the reason for the closure was "policy uncertainty and weak funding."

"The investor group in a unanimous decision has determined that the only responsible action is to dissolve Arena BioWorks and let everyone move on freely in separate ways," the spokesperson said in a written statement.

Arena BioWorks was a private incubator space founded to speed up scientific research and to develop new drugs. Arena had some big backers, receiving some $500M in investment from the likes of Dell Technologies CEO Michael Dell and Bain Capital co-Chairman Stephen Pagliuca.

The company signed its lease in Kendall Square in 2023, and the lease was one of the largest signed that year in the biotech space across Greater Boston, according to MassBio's 2024 industry snapshot.

The 164K SF Binney Street property is part of Alexandria Real Estate Equities' Alexandria Center at One Kendall Square. Alexandria Real Estate Equities didn't respond to Bisnow's request for comment.

It has been a tough environment for biotech companies in recent years.

These companies have seen weakening growth and valuations because of constrained venture capital funding, increased specialty occupations visa fees and uncertainties around tariffs and Food and Drug Administration processes, among other factors, Colliers Research Director Jeff Myers said.

"There's a lot of things these companies are dealing with," Myers said.

Venture capital funding for Massachusetts life sciences companies totaled $2.75B in the first half, down 17% from the same period last year.

With the lack of demand driving the market, tenants in Greater Boston have vacated more space than they have taken up in six of the last seven months, according to Myers. There is 18.6M SF of available lab space in the market, which translates to roughly 32% of the area's inventory.

Of that space, Colliers is tracking 32 buildings that stand completely vacant, and the building's owners are concerned for the future.

Last month, roughly 21 companies, mainly in the life sciences space, failed to meet hiring requirements, resulting in companies needing to give back tax credit dollars, the Boston Business Journal reported.