San Diego Lab Space: Empty Buildings, New Moves

San Diego’s research labs are largely empty—about one‑third of the space remains unused, a figure that rivals its highest levels in recent history.
City rental rates are falling and landlords are offering deeper discounts, prompting a handful of companies to step in.

A Mixed Market Landscape

• Venture capital is returning and investors are feeling more optimistic.
• Yet, the total leased space this quarter is only half of what it was a year ago.
• Analysts note that the commercial real‑estate market is still in recovery mode.

Biotech’s Shift Toward Premium Facilities

• Major biotech firms are relocating to new, high‑quality buildings in Torrey Pines and Del Mar Heights.
• These moves signal a shift from cost‑cutting to investing in better facilities and growth.

International Presence Expands

• A Beijing company will open a new office near Qualcomm.
• A Taiwanese firm has built a $30 million factory in Sorrento Valley.
• These arrivals underscore San Diego’s appeal to global talent and its affordable premium space.

The Bottom Line

• Leasing activity fell sharply in Q1: only 223,000 sq ft signed versus historical averages of 450,000–580,000 sq ft.
• Downtown labs are most affected, with only 10% occupancy.
• Many new buildings from the 2021‑22 boom remain vacant, highlighting a supply‑demand mismatch.