May 14, 2020
Early signs show the life sciences sector is faring better than other major industries, despite the challenges presented by the COVID-19 pandemic. A new report by JLL also notes there’s a pipeline of VC backing building for biotech.
JLL points out the biotech industry hasn’t escaped the impact of the coronavirus crisis. The current focus by both hospitals and the FDA to combat coronavirus is expected to cause delays in clinical trials. This will likely push out research milestones and subsequent funding milestones, triggering business plans to be adjusted amid potential delays in the delivery of new drugs and technologies.
Despite the current climate, the flow of capital into the life sciences sector has continued to be robust, reports JLL. Five biotech VC’s – Arch Venture Partners, Deerfield Management, Flagship Pioneering, Qiming Venture Partners and venBio – secured a total of nearly $5 billion in new funds in Q1.
The San Diego life sciences market has benefited from the rebound in the public markets. Zentalis Pharmaceuticals, a local Torrey Pines company, recently completed a $165-million IPO in March, beating the $100-million goal it had set in the beginning of March.
The San Diego life sciences market ended the first quarter with 19 completed lease transactions that produced a total of 235,868 square feet of total leasing activity. Total leasing volume during the first quarter was down 42% from Q4 2019 and down 26% from the first quarter of 2019. This activity is expected to produce around 400,000 square feet of total leasing activity and more than 250,000 square feet of positive occupancy gains.
The San Diego life sciences cluster saw total availability end the quarter at 10.3% – a 90-basis point increase from the prior quarter and a 150-basis point increase from Q1 2019. First quarter of 2020 asking rental rates for Class A space stood at $4.60-per-square-foot-per-month NNN, with Class B space maintaining its position at $3.98-per-square-foot-per-month NNN.
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