Last Updated on
February 12, 2025
By
Excedr
Finding affordable lab space is one of the biggest challenges for life sciences companies, biotech startups, and research teams. Whether you’re renting a single lab bench in an incubator or securing a dedicated research facility, the costs of leasing or buying lab space can be substantial.
In high-demand life sciences markets like Boston, San Francisco, and San Diego, lab space is more expensive than ever. According to CBRE’s 2024 Life Sciences Construction Benchmarks Report, nearly 40 million square feet of lab and R&D space was under construction across the top 13 U.S. life sciences markets as of mid-2023. Despite this expansion, vacancy rates remain low, and lab space rental rates continue to climb due to rising construction costs and specialized infrastructure requirements.
In biotech hubs like Kendall Square, a single lab bench at LabCentral cost $4,600 per month in 2019, while the average cost per square foot in the same area reached nearly $100. More recently, Cushman & Wakefield’s 2024 Life Sciences Fit-Out Cost Guide found that life sciences facility fit-out costs now average $837 per square foot, with certain high-tech facilities like gene therapy manufacturing labs exceeding $1,230 per square foot. These high costs are forcing biotech startups and early-stage research companies to rethink their leasing vs. buying strategies.
Adding to the financial strain, CBRE’s 2024 analysis found that lab construction costs have increased by double-digit percentages in most U.S. life sciences hubs, further driving up tenant improvement allowances and rental rates. With limited turnkey lab spaces available, startups and established biotech firms must carefully evaluate whether leasing or buying offers the best balance between cost, flexibility, and long-term growth.
This guide breaks down the cost factors of lab space, the challenges of securing a facility, and whether leasing or buying is the best financial decision for your organization.
The life sciences sector has experienced unprecedented growth, driving demand for specialized lab facilities. In response, commercial real estate developers are converting office buildings into laboratory spaces, but these conversions come with high costs and logistical challenges.
As demand continues to rise, securing high-quality lab space is becoming increasingly competitive. Startups and established biotech firms alike struggle to find move-in-ready spaces that meet their research needs without exceeding their budget.
One of the main challenges in securing lab space is construction costs. Unlike traditional office buildings, laboratories require specialized infrastructure, including HVAC systems, fume hoods, and clean rooms, all of which add to the cost per square foot. Additionally, many cities face a high vacancy rate for office spaces, yet available lab facilities remain scarce due to the complexities of conversion and development.
For many biotech startups and pharma companies, purchasing real estate is not financially feasible. Instead, leasing lab space offers a way to conserve capital while maintaining access to state-of-the-art facilities. The flexibility of leasing allows companies to scale operations, access specialized resources, and preserve cash flow for critical R&D efforts.
The cost of lab space is driven by multiple factors, from specialized infrastructure to strict safety regulations. Unlike office space, laboratories require advanced HVAC systems, dedicated plumbing, and customized electrical systems to accommodate research and development activities. These unique operational costs make rental rates for laboratory space significantly higher than traditional commercial real estate.
Laboratories consume far more energy than office buildings, largely due to the specialized lab equipment running 24/7. Instruments such as freezers, centrifuges, autoclaves, and biosafety cabinets require continuous power, driving up electricity consumption. Additionally, HVAC systems in lab spaces must operate around the clock to maintain temperature stability and air quality, a necessity for handling hazardous materials and ensuring biosafety compliance.
On average, lab space consumes 30 to 100 kilowatt-hours per square foot (sq. ft.) annually, compared to significantly lower energy usage in standard office buildings. These higher energy demands translate into increased utility costs, making lab space per square foot more expensive.
Wet labs require extensive plumbing systems to support research. Unlike office space, which has minimal water needs, life sciences companies rely on specialized filtration systems, safety showers, and autoclaves. High-purity water systems are essential for many research applications, adding to construction costs when developing new lab facilities.
Additionally, laboratories often require dedicated drainage systems to safely dispose of chemical waste and prevent contamination. These plumbing upgrades add to the total cost of leasing or building laboratory space.
The disposal of hazardous materials, reagents, and consumables adds another layer of operational costs for labs. Unlike traditional office buildings, laboratories generate biohazardous waste that must be properly handled and transported by specialized disposal services. Fees vary based on waste type, disposal frequency, and local regulations, contributing to the overall occupancy cost of a lab facility.
The complexity of waste disposal systems and the need for strict compliance with environmental regulations make lab space in high-demand markets such as Boston, San Diego, and the Bay Area particularly expensive.
Beyond the lease terms and square footage costs, the operational costs of running a lab facility significantly impact a company’s budget. Biotech startups and research institutions must factor in facility management, equipment maintenance, and daily logistics to ensure smooth lab operations.
Managing electrical systems, HVAC units, fume hoods, and clean rooms requires a dedicated team. Many labs hire a facility manager, who is responsible for overseeing building maintenance, occupancy safety, and regulatory compliance. In competitive life sciences markets like Boston, San Francisco, and New York, a facility manager’s salary can range from $80,000 to $160,000 annually.
Ensuring the proper function of lab instrumentation is critical for accurate research results. Preventative maintenance is required for centrifuges, biosafety cabinets, autoclaves, and fume hoods, all of which must be serviced regularly to avoid equipment failures.
Many companies employ a lab manager to oversee instrument maintenance and lab assessments, with salaries typically ranging from $70,000 to $130,000 per year. Maintenance contracts for high-value lab equipment can add tens of thousands of dollars to annual operational costs, making long-term planning essential.
Labs rely on frequent deliveries of essential consumables, reagents, and lab supplies, many of which require cold storage upon arrival. Handling deliveries, ensuring proper inventory management, and maintaining research materials is often the responsibility of dedicated lab personnel.
In major biotech hubs like the Bay Area and San Diego, logistics costs—including refrigerated shipments and hazardous materials handling—further increase the total cost of maintaining a lab space. A dedicated receiving and inventory management team is often required, with salaries starting at $35,000 per year.
Deciding whether to lease or buy lab space depends on a company's financial strategy, growth plans, and specific research needs. While owning a lab facility provides long-term stability, the upfront costs can be prohibitive—especially for startups and early-stage biotech companies focused on research and development. Leasing, on the other hand, offers flexibility and lower capital requirements, allowing companies to adapt as their lab space requirements evolve.
Purchasing a lab facility gives companies complete control over the property, allowing them to customize the space to fit their specific needs. However, the costs associated with real estate acquisition, facility construction, and maintenance can be significant.
For many life sciences companies, leasing is a cost-effective and scalable solution that allows them to access high-quality lab space without the heavy financial burden of property ownership.
For startups and small biotech firms, leasing laboratory space provides a more financially sustainable approach than property ownership, ensuring access to high-quality facilities while keeping capital free for scientific innovation.
While incubators provide an excellent entry point for many early-stage companies, they aren’t always available or suitable for every organization. In high-demand markets like Boston, New York, and the Bay Area, incubator spaces often have long waitlists and limited capacity, forcing companies to look for alternative leasing options.
Organizations such as LabCentral, Lilly Gateway Labs, MBC BioLabs, Bonneville Labs, and Dupla.Bio offer flexible lab space solutions for companies that need wet lab access without committing to a long-term lease. These facilities provide:
For companies requiring dedicated lab space, some commercial real estate providers specialize in wet lab facilities with built-in HVAC systems, hazardous materials storage, and laboratory-specific safety features.
For companies that outgrow incubators or require specialized research environments, these alternative lab leasing options provide a balance between flexibility, affordability, and scientific autonomy.
Whether you lease or buy lab space, securing the right lab equipment is just as critical as finding the right facility. Outfitting a lab with high-quality instrumentation can be costly, and purchasing equipment outright may not always be the best financial decision—especially for startups and growing biotech companies.
The total cost of equipping a laboratory depends on the type of instrumentation, safety features, and regulatory requirements needed for research and development. Common lab equipment such as centrifuges, biosafety cabinets, fume hoods, and freezers can cost anywhere from tens to hundreds of thousands of dollars. In addition, installation, calibration, and maintenance expenses add to long-term operational costs.
Leasing lab equipment allows companies to:
Instead of depleting resources on large equipment purchases, many biotech startups and life sciences companies choose to lease their scientific instrumentation to maintain financial flexibility.
Excedr simplifies the lab equipment leasing process, helping companies secure the tools they need to advance their research and development without the burden of high upfront costs.
Whether you're setting up a new lab, expanding an existing space, or upgrading instrumentation, Excedr’s flexible leasing options provide the financial freedom to equip your lab without disrupting cash flow.
If you’re looking for cost-effective ways to furnish your lab with state-of-the-art equipment, Excedr is here to help. Contact us today to learn more about our customized leasing programs and see how we can support your life sciences research with affordable, high-quality solutions.
