What the Changing Lab Real Estate Market Means for Building Operations

Aug 10, 2026

Five implications of JLL’s 2026 U.S. Lab Property Report for owners and operators of laboratory facilities

The lab market isn’t bouncing back to what it was in 2021. Instead, it appears to be settling into something different. Tenants have more leverage, lease terms are shorter, and newer buildings are attracting most of the demand. Even as the market begins to recover, owners are still competing for tenants in ways they haven’t had to for years.

Most of the discussion around JLL’s 2026 U.S. Lab Property Report has focused on leasing activity and market fundamentals. Those trends are important, but we think they raise another question.

What do they mean for the way laboratory buildings are operated?

From Thrive’s perspective, building operations have become part of the competitive strategy.

Operating costs deserve more attention

One thing that stands out in JLL’s report is how much leverage tenants have right now. Rents remain under pressure, concessions are still common, and owners have fewer opportunities to grow revenue through leasing alone. That puts more focus on the expenses owners can actually control.

For laboratory buildings, utilities are often one of the largest operating costs. Optimizing HVAC performance, reducing unnecessary energy use, incorporating supply-side demand management programs, and keeping systems running efficiently all have a direct impact on the bottom line. Efficiency has always mattered. Today, it is becoming a bigger part of the business case for owning and operating a competitive lab building.

Older buildings have to compete differently

The report confirms what many owners are already seeing. Tenants continue to gravitate toward newer buildings. That doesn’t mean older buildings are out of the running.

This is especially true in markets like Boston, where much of the lab inventory is older and new construction opportunities are limited.

Most owners are not going to replace major systems or renovate an entire facility just to keep up with new construction. What they can do is make sure the building performs as well as possible.

Reliable HVAC systems, stable environmental conditions, and lower operating costs are all things tenants notice. Good building performance has become another way older properties can stay competitive.

Shorter leases shift the responsibility for efficiency

One of the more interesting trends in JLL’s report is the decline in lease length. As tenants look for more flexibility, they are also less likely to invest in improvements that take years to pay back.

That changes who is driving efficiency projects.

Instead of waiting for tenants to fund upgrades, owners have a stronger reason to invest in improvements that benefit the building as a whole. Projects with shorter payback periods are easier to justify because they reduce operating costs regardless of who occupies the space next.

Not every lab tenant uses a building the same way

JLL points to the growing presence of dry lab users and “tough tech” companies in laboratory buildings. AI, robotics, advanced manufacturing, and aerospace firms are becoming a larger part of the tenant mix.

Those tenants don’t always have the same operational needs as a biotech company. Every new lease is an opportunity to ask whether the building is still being operated for the people inside it today, not the people who occupied it five years ago.

Building performance is never finished

Most laboratory buildings are commissioned when they’re built or renovated. That’s an important milestone, but it isn’t the finish line.

Buildings change over time. Sensors drift, control sequences get overridden, equipment ages, spaces are modified, and tenant needs change.

Continuous optimization helps keep buildings operating the way they were intended while catching small problems before they become expensive ones. That becomes even more valuable in a market where every operating dollar matters.

Final thoughts

The buildings that perform best over the next few years may not be the newest ones. They will be the ones that operate efficiently, adapt to changing tenant needs, and give owners confidence that operating costs are under control.

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