Q4 2025 Lab Market Overview Report
Advanced manufacturing tenants (AI, robotics, etc.) are increasingly competing with life-science tenants for labs, attracted by the same high-power and technical infrastructure. This trend is evident in several large recent leases, including 1X Technologies taking 230,000 square feet in San Carlos, ZipLine leasing 74,907 square feet in South San Francisco, and Periodic Labs securing 37,808 square feet in Menlo Park.
Notably, the San Mateo submarket saw total leasing volume decline 20.1% despite deal activity falling just 2.9%, underscoring that tenant demand remains active but increasingly concentrated towards smaller requirements. This shift toward more modest space needs drove a 17.7% drop in average deal size, falling from 38,854 square feet to 31,970 square feet.
Leasing activity ended 2025 on a strong note, with deals up 17.5% year over year and total leasing volume rising 10.5%. When compared to 2023, deal count increased 62.9% and leasing volume climbed 89.4%. Much of the momentum in 2025 was concentrated in South San Francisco, where leasing volume rose 24.9% year over year, driven largely by 10,000 to 25,000 square foot users. These tenants accounted for 57.1% of all deals in that submarket, an 81.8% increase from the prior year.
Notably, the San Mateo submarket saw total leasing volume decline 20.1% despite deal activity falling just 2.9%, underscoring that tenant demand remains active but increasingly concentrated towards smaller requirements. This shift toward more modest space needs drove a 17.7% drop in average deal size, falling from 38,854 square feet to 31,970 square feet.
Leasing activity ended 2025 on a strong note, with deals up 17.5% year over year and total leasing volume rising 10.5%. When compared to 2023, deal count increased 62.9% and leasing volume climbed 89.4%. Much of the momentum in 2025 was concentrated in South San Francisco, where leasing volume rose 24.9% year over year, driven largely by 10,000 to 25,000 square foot users. These tenants accounted for 57.1% of all deals in that submarket, an 81.8% increase from the prior year.