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SAN DIEGO-In another sign of the city’s recovering office market, Sony Corp. of America has signed a 10-year, $10.6-million lease for 43,519 sf of research and development space. Located at 10030 Barnes Canyon Rd., the manufacturing facility was previously occupied by Corautus/Genestar. According to a broker working on the deal, Sony will lease the entire building as a digital production studio and will move into the space in March.”The resulting transaction has removed one of the only existing cGMP facilities from the San Diego market, leaving only a handful of available pilot plants for small scale pharmaceutical production,” says Greg Bisconti, associate vice president with Burnham Real Estate Life Sciences Group. Bisconti adds that the property is in close proximity to Sony’s main building in the area at the San Diego Tech Center.Brent Jacobs, Greg Bisconti, and Brian Cooper of Burnham Life Sciences Group represented the landlord PMSI/ Veralliance Properties. Brian Driscoll of Colliers International represented Sony Corp.This latest lease signing continues the signal of an improving office market, according to a market report by Grubb & Ellis. “With job increases in San Diego’s diverse industries, tenant demand superseding the supply of office properties, and the final semblances of the recession waning, expect occupancy to continue to rise,” according to the report.The area office vacancy rate, which stands at 8.9%, according to the report, has been dropping for two years and “will remain stable despite over two million sf of product coming online in 2005.” With asking rates gaining ground as well, spec construction projects are under way in areas from Chula Vista to Oceanside. So far, preleasing activity exceeds 48%, with projects such as Broadway 655 already 50% leased. Lerach, Coughlin, Five Star Parking and Best, Best & Kreiger are among the tenants set to take occupancy in August 2005.Job creation is among the key factors driving the rebound. “San Diego has always been the exception to stagnant growth seen in other parts of the nation and state, and should continue to add jobs well into 2005 and beyond,” according to the report. Employment should stay below 4% for 2005, based on data from the California Employment Development Department. Job gains will see major growth from industries such as communications, defense and business services.

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