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Life Sciences Market Still Favors Landlords: JLL Report

San Diego’s life sciences market continues to be a “landlord favorable” market, with low availability of space and rental rates continuing to rise. The latest sector report from JLL shows total space availability in the life science cluster ended the year at 9.2%, including 6.0% direct and 3.2% sublease.

Torrey Pines is expected to see an increase in availability during the middle of 2019 due to The Scripps Research Institute’s planned vacation of 276,000 square feet of space. All of the Scripps space will be repositioned by landlords into new Class A space and deliverable in 2020, with targeted rents in the $4.50 psf/month range ($54 annual).

The UTC/Campus Point market is expected to see very little new vacancy, reports JLL, though two new development projects currently under construction will be delivered in 2019, adding roughly 150,000 square feet of new space to the market.

Leasing activity is strong in Sorrento Mesa, with new inventory expected come to market through the continued conversion of office space into lab space. Meanwhile, Sorrento Valley is expected to continue to attract smaller companies to the area, helping to keep inventory tight.

Rental rates across all submarkets increased throughout 2018, and are expected to continue to grow in 2019. JLL reports starting rents for Class A space in Torrey Pines and UTC/Campus Point are in the $4.15-$4.35 NNN psf/month range. Starting rents for Class A space in Sorrento Mesa and Sorrento for Class A space are in the $3.40-$3.65 NNN psf/month range.

Tenant demand among life science companies is currently hovering around one million square feet, notes JLL.

Pictured Bollert Lebeau’s Sorrento Mesa

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About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.

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