San Diego 2022 Q1 Life Sciences Market Overview

11 May 2022

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Inventory & Availability

  • As of Q1 2022, San Diego’s total lab exclusive inventory totaled over 22 million sq. ft., with 1.6 million sq. ft. in demand.
  • Vacancy across the whole market was at 3.5%, a record low for the region. Core Market vacancy was at 2.7%

Lack of Space Continues to Drive up Rental Rates

  • Asking rents across the market have increased substantially to $6.44 from $6.01 per sq. ft. (NNN) since Q4 2021.
  • In Q1 2022, leasing activity reached 1.54M sq. ft., just under half of the total leasing activity for all of 2021, the highest year on record.

Demand Activity

  • After the San Diego market completed a handful of the largest deals on record for the region, demand for Lab space is normalizing, although demand levels are still expected to remain well above historic norms.

Lab Conversion Trajectory Continues

  • Over 6M sq.ft. of lab inventory has been added to San Diego inventory since 2015, with an additional 3.25M sq.ft. currently under construction.
  • There is 6.5M sq. ft. of Planned Conversions & Construction potentially coming in the next 2-3 years

VC Funding Flows at Record Levels

  • Despite overall VC deals declining this quarter, Life Sciences VC activity remained on pace with Q4, with $621M raised in Q1 2022
  • Biotech/pharma raised the majority with $503.5 million, generated primarily by seven deals of $50.0 million or greater.

Employment Skyrockets

  • Total Life Sciences industry employment in San Diego ended Q1 2022 at 69,400 jobs.
  • Scientific R&D jobs were up 7,300 (+20.3%) since Q1 2020, reflective of the ongoing life sciences growth even during the pandemic.