February 15, 2019
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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