SAN DIEGO—Restaurants that include a brewery concept, as well as athletic amenities like soccer fields, are springing up in life-science space in the San Diego market, JLL SVP Grant Schoneman tells GlobeSt.com. This sector is becoming increasingly more significant as a percentage of San Diego's total office/R&D space leased.

According to the firm's Q4 life-science report, the four submarkets within the life-sciences cluster accounted for 1.53 million square feet of total gross leasing activity among 65 completed transactions, compared to 2015 figures of 1.70 million square feet leased among 62 completed leases. The 2016 leasing total accounted for a 16% increase from the five-year annual average in total square feet leased and an 11% increase in number of completed leases.

The report also revealed that the total availability rate for San Diego's life-sciences cluster (Torrey Pines, UTC/Campus Point, Sorrento Mesa and Sorrento Valley) ended the fourth quarter of 2016 at 10.9%, representing a 70-basis-point decrease from the previous quarter and a 30-basis-point decrease from the same period in 2015. Torrey Pines continues to lead all submarkets with the lowest availability rate at just 5.9%. In addition, during the past two years, the UTC/Campus Point submarket has seen more growth to its inventory base than all of the other life-science submarkets combined.

We spoke with Schoneman about emerging trends in the life-sciences sector and any changes among the tenants seeking this space.

GlobeSt.com: What new or emerging trends are you noticing in the San Diego life-sciences leasing and development realms?

Schoneman: There really weren't any new or emerging trends in 2016, just a continuation of trends established during past few years. Tenants continued to be attracted to amenity-rich campuses that provide class-A space environments. Over 62% of the square feet leased in 2016 took place in class-A space. A common trend among San Diego's major life-science landlords is the focus on growing their portfolios in the high-rent submarkets of Torrey Pines and UTC/Campus. Lower-profile assets in Sorrento Valley and Sorrento Mesa have been and will continue to be sold, with that capital then being deployed into higher-profile assets in Torrey Pines and UTC/Campus Point. It's expected that these established trends among both tenants and landlords will continue in the coming years.

GlobeSt.com: What new types of amenities are tenants seeking or owners providing in this space?

Schoneman: One new trend within life sciences campuses is the incorporation of new restaurants that include a brewery concept as part of the restaurant. There are currently two campuses in the UTC/Campus Point submarket that have plans to include a new brewery concept. Alexandria Real Estate Equities, the market leader in offering amenity-rich environments to its tenants, is including a soccer field as part of its current expansion of the Alexandria Center for Life Science at Campus Point – this is another new concept that hasn't been seen before. Otherwise, most larger class-A life-science campuses continue to offer shared conference centers, fitness centers and a restaurant as part of their offerings.

GlobeSt.com: Are there any changes in the types of tenants seeking this space?

Schoneman: An emerging trend in 2016 is the increased activity among foreign companies who established a presence in San Diego. Two large, foreign, life-science firms, Astellas Pharma and Wuxi Apptec (both very large companies that have numerous worldwide locations), signed leases in San Diego in 2016. Building on that new trend, there are currently numerous Chinese life-science companies looking to establish a footprint in San Diego. Otherwise, the San Diego life-science market continues to be a market that is home to a number of new startup and small-cap companies. Consistent with leasing activity from previous years, two-thirds of all leases signed in 2016 were with companies that had space needs below 17,000 square feet (firms which have approximately 60 people or less in the company).

GlobeSt.com: What else should our readers take away from your report?

Schoneman: In 2016, tenants continued to seek out lab/office facilities that provided the necessary utilities and infrastructure to conduct research, while at the same time offered a collaborative work environment. This typically included abundant natural light in both the office and lab areas as well as liberal amounts of glass between the lab and office areas to help connect the two functions. Over the previous years, facilities within the life-science market have adopted a creative-office design, with a number of new spaces being built with exposed ceilings in the office portions of the suite. This trend is expected to continue in 2017.

SAN DIEGO—Restaurants that include a brewery concept, as well as athletic amenities like soccer fields, are springing up in life-science space in the San Diego market, JLL SVP Grant Schoneman tells GlobeSt.com. This sector is becoming increasingly more significant as a percentage of San Diego's total office/R&D space leased.

According to the firm's Q4 life-science report, the four submarkets within the life-sciences cluster accounted for 1.53 million square feet of total gross leasing activity among 65 completed transactions, compared to 2015 figures of 1.70 million square feet leased among 62 completed leases. The 2016 leasing total accounted for a 16% increase from the five-year annual average in total square feet leased and an 11% increase in number of completed leases.

The report also revealed that the total availability rate for San Diego's life-sciences cluster (Torrey Pines, UTC/Campus Point, Sorrento Mesa and Sorrento Valley) ended the fourth quarter of 2016 at 10.9%, representing a 70-basis-point decrease from the previous quarter and a 30-basis-point decrease from the same period in 2015. Torrey Pines continues to lead all submarkets with the lowest availability rate at just 5.9%. In addition, during the past two years, the UTC/Campus Point submarket has seen more growth to its inventory base than all of the other life-science submarkets combined.

We spoke with Schoneman about emerging trends in the life-sciences sector and any changes among the tenants seeking this space.

GlobeSt.com: What new or emerging trends are you noticing in the San Diego life-sciences leasing and development realms?

Schoneman: There really weren't any new or emerging trends in 2016, just a continuation of trends established during past few years. Tenants continued to be attracted to amenity-rich campuses that provide class-A space environments. Over 62% of the square feet leased in 2016 took place in class-A space. A common trend among San Diego's major life-science landlords is the focus on growing their portfolios in the high-rent submarkets of Torrey Pines and UTC/Campus. Lower-profile assets in Sorrento Valley and Sorrento Mesa have been and will continue to be sold, with that capital then being deployed into higher-profile assets in Torrey Pines and UTC/Campus Point. It's expected that these established trends among both tenants and landlords will continue in the coming years.

GlobeSt.com: What new types of amenities are tenants seeking or owners providing in this space?

Schoneman: One new trend within life sciences campuses is the incorporation of new restaurants that include a brewery concept as part of the restaurant. There are currently two campuses in the UTC/Campus Point submarket that have plans to include a new brewery concept. Alexandria Real Estate Equities, the market leader in offering amenity-rich environments to its tenants, is including a soccer field as part of its current expansion of the Alexandria Center for Life Science at Campus Point – this is another new concept that hasn't been seen before. Otherwise, most larger class-A life-science campuses continue to offer shared conference centers, fitness centers and a restaurant as part of their offerings.

GlobeSt.com: Are there any changes in the types of tenants seeking this space?

Schoneman: An emerging trend in 2016 is the increased activity among foreign companies who established a presence in San Diego. Two large, foreign, life-science firms, Astellas Pharma and Wuxi Apptec (both very large companies that have numerous worldwide locations), signed leases in San Diego in 2016. Building on that new trend, there are currently numerous Chinese life-science companies looking to establish a footprint in San Diego. Otherwise, the San Diego life-science market continues to be a market that is home to a number of new startup and small-cap companies. Consistent with leasing activity from previous years, two-thirds of all leases signed in 2016 were with companies that had space needs below 17,000 square feet (firms which have approximately 60 people or less in the company).

GlobeSt.com: What else should our readers take away from your report?

Schoneman: In 2016, tenants continued to seek out lab/office facilities that provided the necessary utilities and infrastructure to conduct research, while at the same time offered a collaborative work environment. This typically included abundant natural light in both the office and lab areas as well as liberal amounts of glass between the lab and office areas to help connect the two functions. Over the previous years, facilities within the life-science market have adopted a creative-office design, with a number of new spaces being built with exposed ceilings in the office portions of the suite. This trend is expected to continue in 2017.