The demand for leased real estate space in San Diego’s life sciences sector has been on a tear recently, according to a quarterly report from commercial broker CBRE. The result: a tight market for life science tenants with limited space available to lease.
This situation has brought about record-high lease rates and has spurred a burst of construction activity in the market to catch up with demand.
Other findings from the report’s look at the first quarter 2022:
- Vacancy rates were at 3.5%, a record low for the region. The inventory for lab-exclusive property amounts to more than 22 million square feet.
- The dearth of space couple with competition accounts for the run up in rental rates. Asking rents across the market have jumped up to $6.44 per square foot from $6 per square foot since Dec. 31.
- Leasing activity for 2022’s first three months touched 1.54 million square feet, representing half of the entire leasing activity for 2021, which was the highest year ever for leasing activity.
- During the quarter, the sector witnessed the largest deals on record. Which is not so good news. But the good news for those looking to lease is that the competition for lab space is trending back to normal, although rates will continue to rise well above historic trend lines.
Meanwhile, the report made several other important points.
- The trend of converting commercial space to laboratory continues.More than 6 million square feet of inventory has been added since 2015, with another 3.25 million square feet under construction. The CNRE report says we can expect to see another 6.5 million square feet of conversion space come on the market over the next 2-3 years.
- Venture capital funding in the sector continued at a record level during the quarter, which has a significant impact on demand for space. Despite a decline in the number of deals.VC activity kept up with investments announced in the fourth quarter. More than $620 million was invested during the quarter.
- The number of jobs in the life sciences shot past 69,4000 at the end of the quarter. Those jobs in research and development were up more than 20%, which reflects growth despite economic turmoil caused by the Covid-19 pandemic over the past two years.
* * *
Helix Electric, which has an office in San Diego, is among construction companies statewide honored by the Associated Builders and Contractors of California.
The ABC said the companies had achieved top honors on its national 2022 Safety Performance Report.
Step Diamond members are more than six times safer than the industry average, achieving an 84% reduction in incident rates. ABC said the companies achieved its coveted diamond status by going “above and beyond to achieve world-class safety on and off the jobsite.”
* * *
Carrier Air Canada made its first flight from San Diego International Airport to Montréal recently– the first-ever nonstop service between the two cities.
Flights operate three times a week during the peak summer season with arrivals into San Diego on Wednesdays, Fridays, and Sundays and departures from San Diego on Mondays, Thursdays and Saturdays.
* * *
Meanwhile, carrier WestJet has resumed seasonal nonstop service between Vancouver and San Diego. The flights operate twice weekly on Thursdays and Sundays through September.
The resumption comes after WestJet suspended service in March 2020 due to the COVID-19 pandemic.
* * *
To help meet the ever-increasing demand for product management professionals here in the region, the University of San Diego has partnered with Fullstack Academy to launch a bootcamp program for product management.
There are currently more than 15,000 open product management positions, with the average starting salary for product managers hitting $79,000.
A new release said that the number of product management jobs will increase 13% over the next decade.
The online bootcamp starts in July. Registration is open through June 28.
* * *
Award-winning digital marketing agency Red Door Interactive has moved to a new building in San Diego’s Sherman Heights neighborhood.
A spokeswoman for Red Door said the firm hopes its new campus is a step toward bringing more awareness and investment to Sherman Heights, a so-called “designated opportunity zone.”
“Amid a variety of pandemic-fueled hurdles, construction for the project was crafted entirely by local vendors including AVRP, Swinerton, Cultura, and many more,” said the spokeswoman.
* * *
California tax and business law firm Hone Maxwell, which has an office here in San Diego, has opened an office in Tijuana.
“Hone Maxwell began 10 years ago as a California law firm founded by two law school friends and is now an international firm serving clients across Asia, Mexico and elsewhere,” said Managing Partner Josh Maxwell. “With many clients, attorneys and staff — and my wife — all from Mexico, I am … proud to be able to work more effectively with our clients and partners south of the border.”
* * *
Looking for an apartment? Need more living space? Well, apparently a couple of cities in San Diego County may not be the place to look if you need more elbow room.
This according to apartment search website Rent Cafe, which recently did a study on cities where you can get the most space for your rental dollar.
According to the study, Carlsbad is one “the last bastions” of ample private space — with the average apartment offering more than 460 square feet of space per renter.
“Carlsbad is by far the best option for renters seeking ample “alone” space,” according to a spokeswoman. “Renters get 464 square feet of space, or about 1.43 rooms per person.
However, Carlsbad is still below the national average of 540 square feet per renter.
Chula Vista renters get the least personal space in the San Diego at 322 square feet, which equals one room per person. Not far behind are renters in El Cajon, who get only 327 square feet to themselves.
These two cities, Chula Vista and El Cajon, rank No. 5 and No. 6, respectively, among cities with the least personal space per renter nationwide.
* * *
Finally, this bit of news from the beer-making sector in North County.
CoLab Public House, which combines brewing, wine making and a culinary concept under one roof, is opening in Vista.
The new business features 12,500 square feet, with more than 5,000 feet allotted for a tasting room and outdoor patio.
The house will feature Barrel & Stave Brewing, Breakwater Brewing and Laguna Beach Beer Co., with Propaganda Wine Co. making and aging wine on site. The site will also feature an in-house kitchen operated by LA-based Baby’s Badass Burgers.
CoLab has scheduled s three-day grand-opening weekend for June 10-12.
Tom York is a Carlsbad-based independent journalist who specializes in writing about business and the economy. If you have news tips you’d like to share, send them to [email protected]