What’s Next for San Diego’s Life-Sciences Real Estate?

Schoneman: “An emerging trend, which was first introduced to the market in 2016 by local developer Phase 3 Real Estate Partners, is converting high-rise office buildings into new lab facilities.”

SAN DIEGO—San Diego has a very strong and stable life-science economy that has been built over the past 30 years and will continue to grow for the next 30 years, JLL’s SVP Grant Schoneman tells GlobeSt.com. A recent report from the firm reveals that the San Diego market continues to see demand for life-sciences facilities, with more than 1.4 million square feet added in the past 12 months and 1.1 million square feet under construction.

The report also shows that the Torrey Pines vacancy rate sits at 3.3%, which is by far the lowest vacancy rate among the life-sciences submarkets in San Diego. Sorrento Mesa has a moderate amount of vacancy at 7% for the submarket, which is down 1.5 percentage points from the previous year. UTC has the highest vacancy rate among the San Diego life-sciences submarkets at 18.7%, with a large portion coming from new additions to the inventory. Torrey Pines’ low vacancy, most in-demand location and highest rental rates among the life-sciences submarkets has led to a number of projects being upgraded. Also, North County continues to stand out as a choice location for San Diego County life-science manufacturers, with companies like Gilead Sciences, MilliporeSigma (formerly SAFC) and DNAe contributing to the submarket’s growth.