An uncertain economy, tighter budgets and slower fundraising cycles require life sciences companies to take a more prudent look at their lab space. The shift to repurposing and rethinking these specialized facilities can produce opportunities that will not only make sense for companies to take advantage of in the current environment but also be more aligned with their long-term research and development goals.

In this blog post, we explore five cost-cutting trends helping life sciences companies justify their lab footprints in 2025.

Consolidate and sublease underutilized space

There is a visible shift occurring across the portfolios of major pharma companies. Smaller sites are being shuttered and their operations shifted to highly productive hubs. Firms are also correcting their course, reducing the size of their workforce and releasing the additional space to smaller subtenants. This sublease market allows smaller companies to access high-quality lab space without committing to long-term leases and significant investments.

Leverage co-working and shared lab facilities

Shared lab environments are becoming more prevalent as companies seek to stretch limited capital. BioLabs, LabCentral, Alexandria LaunchLabs and JLABS by Johnson & Johnson are a few examples of life sciences incubators and facilities offering readily available infrastructure and access to expensive lab equipment. Shorter-term leases and flexibility to rent as little as one lab bench are helping startups focus on the science and avoid the high costs of building out and operating a lab. With this strategy, investments can be made toward scientific milestones instead of an expansive—and expensive—real estate footprint.

Relocate to secondary markets and lower-cost cities

With increasing lease rates in life sciences hubs such as Boston, San Francisco and New York, some companies opt for regions boasting strong talent pools and lower business costs. Raleigh-Durham’s Research Triangle, Philadelphia, Houston and Denver-Boulder are reflective cities with established life sciences clusters. As an example of this strategy, when Amgen expanded its manufacturing in Holly Springs, North Carolina, rather than Boston, for example, the company benefited from lower operating costs and joined a thriving ecosystem of scientific innovation. These markets offer opportunities for companies to take advantage of tax incentives, university access and a population of quality scientific talent.

Create partnerships with universities and CROs

Outsourcing specific components of lab work is becoming central to how companies are managing operating costs. As opposed to paying high premiums for in-house capabilities, companies are partnering with offsite and overseas Contract Research Organizations (CROs) such as WuXi AppTec, Charles River Labs, and Lonza to perform preclinical and clinical work. University labs are also being tapped by companies for specialized research, as both the technology and purpose of academic and commercial lab facilities often overlap. Other labs find it beneficial to base their scientists domestically while outsourcing wet lab work internationally. This hybrid model saves on real estate and staffing costs while maintaining research timelines.

Adopt flexible and modular lab designs

In an effort to future-proof companies’ real estate, some firms are choosing modular lab layouts that can be quickly reconfigured for different uses or scaled with minimal disruptions. Modular lab systems have pre-fabricated components, such as lab benches, storage units, fume hoods and workstations, that offer flexibility, scalability, upgradability, customization and mobility. This cost-effective solution helps life sciences companies keep their options open without committing to costly permanent fixtures. Hybrid work setups are also possible for roles that do not require a physical presence, such as computational biologists, data scientists and AI researchers. Companies will also increasingly leverage automation and AI to help sustain the most economical footprint.

As life sciences companies navigate economic uncertainty and capital constraints, rethinking lab space has become more than just a cost-cutting measure—it’s a strategic imperative. From consolidating operations and leveraging shared lab environments to relocating to lower-cost markets and adopting modular lab designs, organizations are discovering innovative ways to align their physical footprint with long-term research goals. By partnering with CROs and universities and embracing flexible models, companies can maintain scientific productivity while achieving greater financial efficiency. In 2025 and beyond, the ability to adapt lab strategies will be essential to staying competitive in a rapidly evolving life sciences landscape.