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San Diego Life Sciences Sector Continues to Cool
San Diego’s once hot life sciences sector continued to decelerate in Q1 2017, with sluggish leasing activity, primarily as a result of questions surrounding the impact a new administration would have on the sector. Yet, according to research by JLL, venture capital funding increased 26% from Q4 2016, and M&A activity is expected to accelerate as industry and political forces converge.
Other key Q1 findings include:
- Region secured more than $56 billion in M&A activity since 2011
- A total of 17 transactions were completed Q1, a 15% drop from Q4 2016, and no deal larger than 30,000 square feet was recorded
- 223,282 square feet of total leases signed, a 58% drop from Q4 2016
- Just 24% of leases signed during Q1 occurred in Class A space, down from quarterly average of 50%
- Renewals accounted for 41% of total Q1 deals, well above trailing three-year average of 21%
- Just 32,692 square feet of positive net occupancy growth was recorded, well under average of 193,000 square feet
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