In the commercial real estate market, the life sciences sector remains strong according to an industry analysis, with low vacancies and rising rents as 2021 wrapped up.
CBRE notes that by the end of the fourth quarter in response to demand, 31.6 million square feet of space designated for laboratory and research and development were under construction in the U.S. That’s almost double the 2020 numbers.
San Diego, among the top 12 markets in the country for life sciences, has an inventory of 18.63 million square feet with a vacancy rate of 4.3%. Nearly 5 million square feet of lab and R&D space were under construction in the region, with 31.2% of that pre-leased.
Most of that was new construction, with 1.6 million square feet set to be converted for lab and R&D use.
That pace of construction left San Diego second, behind Boston, in ongoing construction, and ahead of San Francisco and the Raleigh-Durham area in North Carolina.
Among the hot San Diego County locations for life sciences, Torrey Pines has a 0% vacancy rate and demands the highest regional price per square foot at $88.80. Sorrento Mesa boasts the highest inventory at 6.2 million square feet.
The other local areas with more than one million square feet of inventory are UTC, with 3.88 million, and Sorrento Valley, with 1.5 million.
Some of the top local leases include:
- BD Biosciences – 220,000 sq. feet, Del Mar Heights
- Boundless Bio – 80,200 sq. feet, Torrey Pines
- Encodia – 66,000 sq. feet, Sorrento Mesa
- Inscripta – 48,000 sq. feet, Sorrento Mesa
Two other leases involved large spaces leased to undisclosed tenants – 309,000 square feet and 144,000 square feet – in Torrey Pines and the Interstate-15 corridor.
Nationally, the vacancy rate for U.S. life sciences space is at a tight 4.8%, pushing rents up 7.8% to $67 per square foot.