Demand in San Diego’s life science market is continuing to grow with no reports of slowing down anytime soon. According to BioMed Realty, one of the leading owners and operators of life science properties in the region, San Diego continues to make out well in the sector.
“You have to step back and look at the industry as a whole,” Kevin Tremblay, Vice President for BioMed’s San Diego region said. “It’s really a tremendous, exciting time for the life science industry; it’s really in a revolution, a golden age for the industry, and that’s due to just the astounding cumulation, that’s really been derived from the past decade of just new technologies, from big data to computational science converging with biology and that’s created these new technologies that’s obviously increased demand and interest from venture capital markets to the public as well.”
In their hometown of San Diego, BioMed owns and operates approximately 3.1 million square feet, with an additional one million square feet in the works. With locations in many major life science markets across the U.S., the company’s portfolio has grown to nearly $20 billion overall with approximately 13.5 million square feet of life science properties in total. In San Diego, many notable tenants occupy space at these properties, including Illumina, U.C. San Diego School of Medicine, Abbott Laboratories, Thermo Fisher and The Salk Institute.
“The impact has been interesting here in San Diego from a real estate perspective…It’s a great time to be a life sciences partner, to provide the infrastructure, the expertise, the capital, to provide the critical real estate,” Tremblay said.
According to Tremblay, demand in the region has outpaced supply at an unprecedented rate. Beginning with the COVID-19 pandemic in 2020, demand for space in life science has continued to grow as more of a focus has been put on technology and health.
“If you look at just the past 12 months or so, demand has outpaced supply in the market 3:1. That’s pretty unique,” Tremblay said. “We’re currently tracking about 3.5 million square feet of demand and there’s only about 600,000 square feet to capture that demand…So as a real estate developer, and partner, we’re always looking to expand our footprint, expand our portfolio to support both our existing partners and emerging companies as well as companies that are looking to San Diego to expand their research facilities.”
This has led to several trends in the sector, including the conversion of office and industrial properties into life science facilities. Due to the lack of land available to build facilities from the ground up, Tremblay said this has been a popular method for many developers, including BioMed. In the past two years, BioMed has converted 400,000 square feet within their own portfolio and acquired over 300,000 square feet of office and industrial space, he said.
“What we’re seeing at the ground level is due to all the increase in capital and these new technologies and research and development, that typically results in an increased demand in real estate,” he said. “Historically, it’s always been a very land constrained market, so we have a very clustered market…There’s very limited opportunities to acquire land, so with that, you’re kind of forced to look at infill opportunities or where you can buy older product and provide new development.”
However, Biomed also has been responsible for ground-up developments. More recently in San Diego, the company has been developing the Apex. The 204,000 square-foot office building located at 9775 Town Centre Drive, is 100 percent pre-leased to Apple.
With the focus on the life science sector stronger than ever, Tremblay said he expects the company’s rapid growth in the region to stay strong over the next several years.
“There’s going to be demand and interest in the technologies that help support those ideas. I think quality of life is going to be the focus. Like I said earlier, I think COVID-19 is the tipping point that’s really gotten people to recognize the importance of life sciences, so I think you’re going to see continued interest in life sciences going forward and that’s only going to increase demand,” he said.
