Pharmaceutical Firm Takes Another Large Office Space in San Diego’s Growing Biotech Market
September 22, 2021
Sorrento Therapeutics Leases Full Building in High-Demand University Town Center
Sorrento Therapeutics leased a 52,000-square-foot building in San Diego’s University Town Center neighborhood, its second large deal in as many months and another indicator of rapidly rising demand for biotech space in the region.
Kilroy Realty Corp., owner of the building at 4690 Executive Drive, confirmed the lease in a statement.
Sorrento Therapeutics, which develops cancer, pain and COVID-19 treatments, filed paperwork in July showing it intended to lease 163,285 square feet at a building in development in the Sorrento Mesa neighborhood by landlord Healthpeak Properties. The biotech company did not immediately respond to CoStar News’ request for comment on its latest lease.
Demand for life-science laboratories and offices has been on the rise over the past decade and has accelerated over the past two years, sending tenants and landlords looking for space beyond San Diego’s original biotech hub of Torrey Pines in La Jolla. Neighborhoods to the east and north of Torrey Pines are now getting increased attention, especially University Town Center, Sorrento Mesa and Del Mar Heights.
Acadia Pharmaceuticals previously leased 98,000 square feet at Kilroy’s One Paseo in Del Mar Heights, and Kilroy Senior Vice President Nelson Ackerly said in a statement that the developer is now revising plans for its previously announced 600,000-square-foot Santa Fe Summit office project off state Route 56 to include specialized lab and other types of spaces needed by life-science and tech firms.
Ackerly said vacancies are shrinking and office rents are up as much as 20% year over year in neighborhoods such as Torrey Pines and University Town Center, which has emerged as San Diego’s second-largest office neighborhood by asset value and also among its priciest for rents. It has traditionally served as the region’s “second downtown” as a key hub for law firms, banks and other financial service providers.
But UTC has racked up several large leases by prominent life science and technology firms, including Amazon, Apple and Takeda Pharmaceuticals, in the past five years.
“Although the vacancy rate has risen to 10.3%, the submarket’s diversity of industries should keep further vacancy expansions in check,” said Joshua Ohl, San Diego director of market analytics for CoStar Group, in a report on the neighborhood.