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Biotech Still Big Driver of Space Demand

Brokers at JLL report that after a slow first quarter, life-science-related facilities leasing in San Diego County sprang back to life in the second quarter. That period saw 644,212 square feet of total gross office and lab-space leasing by biotech firms, producing 205,529 square feet of net occupancy growth.

JLL’s recent second-quarter report noted that the bulk of leasing activity is coming from smaller life-science companies, with a total of 16 deals completed with companies that had space needs under 17,000 square feet. Those smaller firms accounted for 67 percent of the second quarter’s leasing activity, and the trend was expected to continue in the year’s second half.

Big local lease signings in the year’s first half were completed by firms including Takeda (163,649 square feet at UTC), Halozyme Therapeutics (58,760 square feet in Sorrento Valley), and Nielsen BioSciences (7,500 square feet in Sorrento Valley).

JLL brokers said the region’s life-science space availability rate — including vacant and soon-to-be-vacated spots — was at 9.9 percent at mid-year, the first time it has been below 10 percent since the fourth quarter of 2014. However, local space inventory could grow in the second half, as developers mull options including converting older industrial and office properties into lab space.

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