San Diego, CA
Increase in Lab Vacancy in Q1 Opens More Options for San Diego Life Sciences Companies
May 10, 2023
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San Diego’s lab vacancy increased in the first quarter, providing relief for companies that had found little available space in recent years, according to a new report from CBRE.
The average vacancy of 5.6% in the first quarter marked an increase of 120 basis points from the previous quarter. Together, the core life science submarkets of Torrey Pines, UTC, Sorrento Mesa and Sorrento Valley saw an increase from their collective record low vacancy (2.7%) in the first quarter of 2022 to 5.5% in the first quarter.
"It is no secret that life sciences have been a hot commodity in recent years due to the demand for biotech and pharmaceutical research and development," said CBRE's Executive Vice President Ted Jacobs. "However, after the surge in demand for lab space over the last three years, the sector has become oversaturated, leading to a cooling in the market. Some investors are taking advantage of the slowdown to buy life sciences properties at a discount, expecting demand to increase."
Meanwhile, consistent with national trends, venture capital funding for life sciences companies declined in the first quarter from the fourth amid banking sector turmoil, which constrained capital availability for the tech and life sciences industries.
Developers had more than 40 million sq. ft. of lab space under construction in the 13 markets in the first quarter, with 25% preleased. San Diego has the fourth highest nationally under-construction lab space, with over 5 million sq. ft., 30% of which is preleased.
Top Life Sciences Markets: Select Q1 Stats
| Market | Market Size* | Vacancy | Sq. Ft. Under Construction | Sq. Ft. of Current Tenant Demand |
| Boston/Cambridge | 54.4M | 3.4% | 16.5M | 2.4M |
| Chicago | 2M | 28% | 764,963 | 1.3M |
| Denver/Boulder | 2.9M | 6% | 458,864 | 570,000 |
| Houston | 1.9M | 23.2% | 618,000 | 70,000 |
| Los Angeles | 6.2M | 12.8% | 439,287 | 811,500 |
| New Jersey | 16M | 8.3% | - | 440,000 |
| New York City | 2.9M | 8.2% | 861,108 | 713,000 |
| Philadelphia | 10.4M | 11.6% | 2.4M | 2.1M |
| Raleigh-Durham | 9M | 7.4% | 679,994 | 471,757 |
| San Diego | 24.2M | 5.6% | 5.3M | 1.5M |
| San Francisco Bay Area | 33.1M | 8.4% | 9.4M | 2.8M |
| Seattle | 8.6M | 7.5% | 1.3M | 535,000 |
| Washington D.C./Baltimore | 12.7M | 2.6% | 1.6M | 894,000 |
*In square footage of existing lab space
To read the full report, click here.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2024 revenue). The company has more than 140,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.