Life science industries and I-15 Corridor submarkets lead Q1 in total leasing
As the North Cities cluster submarkets tighten, innovation firms are gravitating to the I-15 Corridor to expand
June 08, 2020
Core submarkets office/lab leasing by square feet (Q1 2020)
Office/lab industry leasing composition (Q1 2020)
- Within the submarkets of UTC, Del Mar Heights, and Sorrento Mesa, both technology and life sciences firms have been competing for quality space over the last 24-months. This has created a limited supply of large block availabilities within the North Cities Cluster causing larger quality requirements to expand elsewhere.
- Pre COVID-19 tenant demand was strong, putting continued upward pressure on overall market rental rates (up 5.7 percent YOY) and now standing at $3.66 FSG/month, as space became tighter.
- The I-15 Corridor (Rancho Bernardo and Scripps Ranch micromarkets) has seen active demand by technology, life sciences, and defense contractor companies.
- While net absorption was minimal in Q1 for the I-15 Corridor, leasing activity for 2020 was off to a strong start, with tenant move-ins expected later in the year. Currently there are three Class A direct blocks over 50,000 s.f. in the I-15 Corridor.
- The defense industry, which is concentrated in the I-15 Corridor, could see expansion as demand from the Department of Defense strengthens. The 2020 DoD national budget exceeds the previous year with a total of $712 billion. In 2019, San Diego was granted $28.1 billion in direct spending, fueling demand for office and R&D.