JLL Reports San Diego Life Sciences Vacancy Drops to 1.7%

While life science venture capital funding decreased in the first quarter, leasing activity remains above pre-COVID levels in San Diego, according to a JLL report. As a matter-of-fact, leasing volume saw a record 1.8 million square feet in Q1, led by Neurocrine Biosciences in Del Mar Heights and Bristol-Myers Squibb at UTC/Campus Pointe.

Meanwhile, rent prices are reaching record highs, with limited supply and continuing solid demand. Class A asking rates are in the $7.50 NNN range at Torrey Pines and UTC/Campus Point and $6.50 NNN in Sorrento Mesa and Del Mar Heights. 

The life sciences news is not all rosy, however. JLL expects significant headwinds in 2022 as venture capital funding has decreased in each of the last five quarters, and the IPO market has dropped-off substantially.  With that in mind, there is real potential for some slowing in tenant demand and rent growth for the remainder of the year.