Tenant demand for life science real estate in San Diego remains robust so far in 2016, even as leasing activity has declined from levels seen in the first half of 2015, according to a new report from brokerage firm JLL.
Researchers said there were 16 companies actively negotiating on more than 875,000 square feet of office and lab space in the local market as of mid-2016, setting the stage for strong leasing activity in the year’s second half.
Gross leasing activity by life science tenants totaled nearly 800,000 square feet in the first half, and tenants are currently evaluating options for an additional 605,000 square feet of future requirements, JLL reported. The market has recently seen rental rates plateau, after two straight years of double-digit increases that brought starting rents to near peak levels.
A total of 11.5 percent of San Diego’s 14.4 million square feet of overall life science real estate was available to occupy as of mid-2016, but just 5.3 percent was available in the Torrey Pines submarket.
Big space expansions in the first half were made by companies including Illumina Inc., which leased the entire 316,262-square-foot i3 campus at University Towne Center; Fate Therapeutics, which expanded into 47,924 square feet in Torrey Pines; Astellas Pharma, which signed a lease for 25,457 square feet in Torrey Pines; and Explora Biolabs, which signed a lease for 5,004 square feet in UTC for what will be its fifth San Diego location.