How Life Science Campuses Are Evolving

• Science for life: Spec developments for life science buildings are evolving to provide advanced infrastructure and flexible layouts.

• CBRE’s big beat: The world’s largest commercial real estate brokerage beat expectations by 10% largely due to the growth of its data center services.

• “Look through” REITs: A proposal from the IRS would change the way that REITs are able to take foreign investment and could even apply retroactively.

• ▶️ Video: Did you miss yesterday’s webinar on how apartment owners are reducing costs and risks, while improving resident experience? Watch it now

Perspectives

How Life Science Campuses Are Evolving

Life science real estate is having a moment. With startups racing to commercialize research and major pharma firms rethinking their lab footprints, demand for plug-and-play space has pushed developers to build before tenants even sign on. Speculative lab projects, once seen as risky, are now shaping the next generation of research campuses—offering ready-to-use facilities for companies that don’t have years or millions to spend developing their own. Behind the cranes is a bigger shift in how the industry thinks about its physical infrastructure: flexibility, scalability, and community are now just as important as square footage.

What’s emerging is a new type of building—one designed to evolve alongside the science happening inside it. Developers are creating flexible lab grids, reinforced infrastructure, and systems that can accommodate everything from small R&D teams to AI-heavy biomanufacturing operations. The goal isn’t just to build faster but to build smarter, anticipating the rapid shifts in technology and workflow that define modern life science. The result is space that works harder, lasts longer, and stays relevant in an unpredictable market.

But these new developments aren’t just about research—they’re about culture. Cafes, fitness centers, public art, and outdoor plazas are now part of the lab landscape, a reflection of the fierce competition for scientific talent. These campuses blur the line between workplace and community hub, signaling a future where lab design is as much about inspiration as innovation. For cities betting on biotech, they could become more than just places of discovery—they could be the new anchors of urban life.

Overheard

CBRE Rides Data Center Boom Into Record Quarter

CBRE Group just delivered a blockbuster third quarter, proving that the real estate services giant is riding the wave of data center growth and record leasing momentum. Revenue climbed to $10.26 billion and earnings per share beat expectations by 10%. “We often talk about our breadth and depth across asset type, client type, line of business and geography," said CEO Bob Sulentic. "The data center asset type and related client group provides a good example. We produced nearly $700 million of revenue from data centers in the third quarter, 40% more than in 2023’s third quarter.”

What’s behind the surge is a potent mix of structural demand and capacity constraints. Leasing volume in the Advisory segment rose 18%, led by industrial, office, and data center growth in the U.S. In parallel, CBRE’s Building Operations & Experience arm reported property-management revenue up 30%. Sulentic underscored that “real estate facilities have become much more critical to companies than they used to be.” The message is clear: data center expansion isn’t just a niche—it’s a driver of growth across CBRE’s global platform.

Still, the good news comes paired with caveats. Sulentic and his management team noted in Q&A that while they expect sustained strength, they do not expect a rapid normalization of the market. “We don’t believe we’re going to go back to pre-COVID levels,” Sulentic said of office leasing, arguing that “this leasing success isn’t driven by prime space.” That signals caution—fixed-income markets, electrification demands for data centers, and heightened capital-investment competition mean the margin for error is razor-thin.

IRS Proposal Could Shake Up Foreign REIT Investment

At its core, the “look-through” rule governs how the U.S. tax code determines whether a real estate investment trust (REIT) is considered “domestically controlled” under the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA). If a REIT is domestically controlled, shares in that REIT are not treated as a U.S. real property interest, meaning foreign investors avoid certain U.S. tax obligations when selling stock. The look-through concept arises when a U.S. domestic corporation (“blocker”) owns the REIT but is itself owned significantly by foreign parties—under the rule, the IRS could “look through” the blocker to its foreign owners, thereby disqualifying the REIT from being domestically controlled.

Now, the Internal Revenue Service (IRS) has proposed withdrawing that look-through rule altogether—retroactively. The move follows earlier 2024 final regulations that increased the foreign-ownership threshold from 25% to over 50% before triggering look-through and introduced a 10-year transition rule for existing structures. With the latest proposal, REITs and investment sponsors may need to revisit their ownership structures, foreign investor certifications, and exit strategies—especially if they counted on look-through calculations to shield them from FIRPTA exposure.

Without the look-through rule, many structures that relied on U.S. blockers to maintain domestically-controlled status may now face unexpected tax consequences and withholding obligations. The retroactive nature of the proposal adds further layers of risk. Past deals, exit plans, and capital-allocation models may need revisiting. While the withdrawal may simplify some future structuring, in the near term it raises significant uncertainty around foreign investor participation, REIT capital flow, and portfolio strategy.

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