SAN DIEGO—One example of how San Diego's highly educated workforce is impacting the local real estate market is through the continued growth of large pharmaceutical and biotech companies in the region, JLL SVP Grant Schoneman tells GlobeSt.com. According to recent research from the firm, San Diego is a leader in STEM degrees in Southern California, producing nearly 5,000 degrees last year majoring in science, technology, engineering and mathematics and 14.3% of the region holding a graduate degree, a greater share of the adult population than anywhere else in Southern California.

In addition, UC San Diego was recently ranked 15^th-best university in the world by the Academic Ranking of World Universities. Also, San Diego has seen 36.5% growth in employment among biotechnology and technology companies in the last 10 years and is home to a well-educated workforce appealing to numerous tech and biotech firms. Top companies include Qualcomm, ViaSat, Mitchell International, General Atomics, Sanford-Burnham, Illumina, Pfizer and Salk Institute.

We spoke with Schoneman about what the data means for San Diego's real estate market and how local CRE can capitalize on all the STEM degrees coming out of this region.

GlobeSt.com: What does this research means for San Diego real estate?

Schoneman: San Diego has a history of seeing a number of successful tech and life-science companies formed here, and the fact that the number of STEM graduates is getting even more robust is great news for the local marketplace. One example of how the highly educated workforce is impacting the local real estate market is through continued growth of large pharmaceutical and biotech companies in the region. The amount of top-level scientific and engineering talent in San Diego makes the region a highly attractive place for a number of high-profile pharmaceutical and biotech companies that have a significant R&D presence in the local marketplace. Some of these companies include Eli Lilly, BD, Takeda, Vertex Pharmaceuticals and Celgene—of which the majority have recorded significant growth in their local facilities over the past few years.

GlobeSt.com: What sort of an edge does it give the market over others?

Schoneman: The large amount of highly educated engineering and scientific workforce gives San Diego an edge through being able to attract a number of significant life-science companies to the region. This year has seen multiple companies elect to move into San Diego, both national and internationally headquartered firms. These research companies are moving to San Diego to open up new facilities primarily to tap into the large pool of highly educated scientists. Additionally, when compared to San Francisco and Boston, San Diego has more favorable wages, lower housing costs and commercial rental rates that are between 35% to 45% cheaper. As the number of STEM graduates in San Diego is forecasted to remain strong, look for this to be a driving force behind continued growth within the life-science and tech sectors.

GlobeSt.com: How can local CRE capitalize on all of these degrees coming out of this market?

Schoneman: One of the ways that the local CRE market can capitalize on the large number of scientists and engineers coming from local universities is through providing small spaces to house new startup companies. San Diego is a highly entrepreneurial area that sees a number of new tech, biotech and engineering firms created every year. For example, in terms of biotech/wet lab space, approximately one-third of all the leases signed on an annual basis are with local startups or seed-funded companies that have space needs under 7,000 square feet. Landlords have continued to position space to attract these smaller companies, most notably in Sorrento Valley and Sorrento Mesa. However, the Torrey Pines and UTC submarkets are seeing more new space designed to attract these smaller firms. There are also a number of incubators in San Diego, including: BioLabs San Diego, EvoNexus, J-Labs and Lab Fellows, to name a few, that help provide small spaces for new tech and biotech companies.

GlobeSt.com: What does this mean for future biotech and tech space in this market?

Schoneman: Exciting new technologies are being produced every year at local universities. The growing number of STEM graduates, which seems to be multiplying on an annual basis, will only continue to produce additional biotech and tech companies that will in-turn fill up vacancies in local incubator and biotech campuses. What these companies are looking for is highly amenitized campuses that are built with flexibility and scalability in mind, and that is what today's savvy landlords are giving them. Access to campus restaurants, high-end fitness centers, game rooms, outside gathering areas and creative work environments is becoming more of the norm in the San Diego life-science and tech real estate markets.

We spoke with Schoneman about what the data means for San Diego's real estate market and how local CRE can capitalize on all the STEM degrees coming out of this region.

GlobeSt.com: What does this research means for San Diego real estate?

GlobeSt.com: What sort of an edge does it give the market over others?

GlobeSt.com: How can local CRE capitalize on all of these degrees coming out of this market?

GlobeSt.com: What does this mean for future biotech and tech space in this market?

Instant Insights /

The CRE Potential From SD's Lead in STEM Degrees

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