SAN DIEGO-The San Diego life sciences sector has moved at a slow pace over the last few quarters with a low transaction volume, according to a report released by Cushman & Wakefield's Global Life Sciences Practice Group. However, mergers and acquisitions activity, initial public offerings and funding activity has been on the rise.
San Diego companies are the third-most invested in, following behind San Francisco and Boston, according to a report by PricewaterhouseCoopers LLP and the National Venture Capital. Venture capitalist investments are up 26% from one year ago, with $1.8 billion invested in 174 life science companies. In addition, there is positive news on the exit front, in IPOs, corporate partnerships and M&A.
“M&A activity was extremely high in 2012, with such acquisitions as Amylin ($7 billion), Gen-Probe ($3.7 billion), and Ardea ($1.26 billion),” says Greg Bisconti, senior director of C&W's Global Life Sciences Practice Group. “M&A activity continues into 2013 with the $175 million acquisition of Althea Technologies by Ajinomoto announced in early March and the recent announcement of Verenium entering an agreement to be acquired by chemicals giant BASF. In the first quarter, Thermo Fisher Scientific revealed its intent to purchase Life Technologies for $13.6 billion, or $76 per share. Another big deal was the Johnson & Johnson acquisition of Aragon Pharmaceuticals for up to $1 billion, which included an upfront cash payment of $650 million.”
Throughout 2013, San Diego has seen limited quality lab space availability as well as limited major transaction activity. In 2012, the life sciences sector had an average of 213,000 square feet of leasing activity per quarter. The first three quarters of 2013 averaged just 158,400 square feet per quarter.
San Diego saw vacancy rates in the 10% range throughout the first and second quarters of 2013 with a slight rise in the third quarter to 11%, says the report. Due to the slow start in 2013, owners remain motivated and the major life science landlords are continuing to upgrade their buildings.
“We expect rates to rise in the coming quarters due to decreasing vacancy, making this a good time for tenants to assess their current facility to decide if it will meet their long term needs,” says Brent Jacobs, executive director of C&W's Global Life Sciences Practice Group. “This is also an ideal time for local entrepreneurs to grow and new companies to arise.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
