San Diego’s world-renowned life science cluster broke a new record at the start of the year: The vacancy rate for lab and office spaces hit 14 percent — an all-time high. Three years ago, businesses were fighting for space in San Diego’s main life science hubs like Sorrento Valley, La Jolla and Del Mar. But now, there are more buildings on the market than local companies want to lease. The area’s overall vacancy rate for life science space jumped to 14.3 percent — up from 5.7 percent during the same period last year, shows first quarter data from commercial real estate firm Jones Lang LaSalle.
A big driver of this trend: Several companies have downsized or left offices completely in recent months. Gene therapy firm Locano Bio, for example, ceased operations and vacated 39,000 square feet of space in Torrey Pines. Then there’s San Diego’s gene-sequencing giant, Illumina, which offloaded its UTC office to save millions of dollars.
More local life science companies are subleasing their unused offices to save money or accommodate a smaller staff following layoffs. There are roughly 1.2 million square feet of available sublease space on the market — almost double what it was this time a year ago, JLL said.
“It’s been significant,” said Taylor DeBerry, senior associate of JLL’s life science group. “We’re tracking about a million square feet of sublease space in the market right now, and that’s a higher number than we’ve ever seen before.
“A lot of that has to do with the over-exuberance and oversubscribing of space that happened during COVID. Companies are needing to pull back because the venture capital market is not as easy to raise money as it was during that time.” ...
Maybe the LA market is totally different. Just wondering...
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