Meta founder Mark Zuckerberg and his wife Priscilla Chan added a drop in a very empty bucket for life sciences leasing.
The Chan Zuckerberg Initiative leased 38,000 square feet from Columbia University to house the Chan Zuckerberg Biohub New York, the Commercial Observer reported. The deal is for space in Columbia’s Studebaker Building at 615 W. 131st Street.
Asking rent for the space was not disclosed, but a report by commercial real estate firm CBRE places rent for life science space was $115.96 per square foot in the second quarter of 2024.
CBRE’s John Issacs and Joseph DeRosa represented the Chan Zuckerberg Initiative in the deal.
The Chan Zuckerberg Initiative provided $250 million in funds for the $300 million facility. Announced in 2023, New York’s Economic Development Corporation and Empire State Development, along with Gov. Kath Hochul and Mayor Eric Adams spent $10 million in public funds on the property.
The deal comes amid a significant dropoff in demand for life sciences real estate in the past few years, despite 33.5 million square feet of lab space completed since 2020 and another 26.4 million square feet currently in the development pipeline, according to a September report by CommercialEdge.
“This year, it has become clear that developers over-responded to demand for lab space, leading to a supply glut in the sector,” the report said.
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Only three life science assets had been leased in 2024, according to the Commercial Observer, while $1.8 billion was transacted across 20 sales in 2023 and $6.2 billion was transacted in 62 sales in 2022.
Vacancy rates have also sharply increased, rising by 350 basis points since the end of last year, according to a report by Cushman and Wakefield. Factors driving availability include more sublease space on the market and a rise in spec deliveries lacking tenants.
— Caroline Handel