The pandemic won't hamper San Diego's life science industry. The market is one of the top life science hubs in the nation, third only to San Francisco and Boston. Market experts expect these will continue to perform well through the downturn and well into the future. In fact, the pandemic could fuel activity in certain life science sectors, such as diagnostics, which are busy analyzing COVID-19 testing.
"San Diego is very well positioned to weather the storm. The life science sector is a major factor in the local economy with San Diego being a well-established life science research hub, ranking third in the nation behind the Boston and San Francisco markets," Grant Schoneman, managing director at JLL, tells GlobeSt.com. "Leading analysts expect these three life science clusters to remain at the forefront in the years to come."
San Diego's life science sector is already robust and dynamic—and, perhaps most importantly for what is to come, well capitalized. "The San Diego life science sector has a strong ecosystem that is supported by a wide range of therapeutic, diagnostic and genomic companies," says Schoneman. "The local sector continues to see a number of new companies formed each year, often being spun out of technology from UCSD, Illumina, TSRI or one of the other leading companies in town. These new companies have been successful in securing strong venture capital partners to help advance their technologies, something that will help carry them through the tough months ahead."
San Diego's talent base will help to ensure the market remains a life science hub, and it will fuel growth for the local industry. "San Diego has a very strong base of talented scientists and engineers that will continue to drive growth among life science companies as well as large technology companies that have recently entered the San Diego marketplace," says Schoneman. "And as "big tech" continues its push into the healthcare sector, San Diego is well positioned to see continued expansion.
While the industry is well positioned to perform through the downturn, it will certainly see some impact from the pandemic and the economic dislocation. In the first quarter, the market already saw a decrease in leasing activity, although not unusual for first quarter performance. "The decrease in leasing activity during first quarter of 2020 compared to the fourth quarter of 2019 is a routine trend seen throughout previous years," says Schoneman. "On average during the past five years, leasing activity in the first quarter has been 31% lower than leasing activity from the fourth quarter of the prior year. Typically, the fourth quarter of the year is one of the strongest quarters for life science leasing activity while the first quarter of the year is one of the weaker quarters, so the decrease in the first quarter of this year isn't a concerning stat." The second quarter performance, like most industries, will provide a better window into the market.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Kelsi Maree Borland
