Biotech lab space sees shift in emerging San Diego submarkets
For some time, Torrey Pines has been home to the largest life science companies wanting to be located near UCSD and other renowned research institutes.
September 03, 2019
- For some time, Torrey Pines has been home to the largest life science companies wanting to be located near UCSD and other renowned research institutes. But over the last few years, demand for lab space has accelerated, spurring ground-up construction and office-to-lab conversions in the surrounding traditional office submarkets such as Sorrento and UTC.
- The biotech lab market is now at 19.2 percent of the 80.3M s.f. office inventory and is projected to be 21 to 22 percent of the office inventory by 2022 with lab projects slated in the pipeline. As result of established biotech companies hitting record profits and VC funding pouring into the sector with a total of $3.2B since the beginning of 2018, lab space as a percentage of total office supply in San Diego has risen and will continue to rise.
- Although Torrey Pines has historical had the greatest percentage of lab, Sorrento Mesa and UTC have recently been at the center of the growth in new lab supply. Since 2016, and projected through 2022, Sorrento Mesa will have added nearly 2M s.f. of lab, bringing the total inventory to over 5.7M s.f.. Much of the new lab supply in Sorrento Mesa and UTC over the past few years has been office or industrial-to-lab conversions, eating away at the office and industrial inventory. As lab supply climbs, this is changing the market dynamics for traditional office users having to scramble for high-quality large block space.
Source: JLL Research