Leasing activity continued on a record pace during the first half of the year, with a total of 1,117,903 square feet of completed transactions that accounted for 646,183 SF of positive net company growth. To put this into perspective, the average first-half leasing activity over the last five years is 453,197 SF – 2015 recorded a 147% increase above the five year average. Below are some other market highlights from the first half of 2015.
- Record leasing activity continues
- The life sciences cluster recorded 37 lease transactions during the first half of the year, a 3% increase compared to the first half of 2014 and a 42% increase compared to average over the last five years
- Companies that signed leases during the first half of the year included: Eli Lilly (304,326 SF), Illumina (145,946 SF), Synthetic Genomics (74,629 SF), Otonomy (61,755 SF), Receptos (23,478 SF), Trovagene (22,595 SF)
- There are over 520,000 square feet of deals currently under negotiation and another 545,000 square feet of active requirement in the market
- Rental rates continue to surge to new heights
- Asking rental rates for Class “A” vacancies in Torrey Pines and UTC are now in the high $3 to low-to-mid $4 range
- Asking rental rates for Class “A” vacancies in Sorrento Mesa and Sorrento Valley are now in the low $3 psf/month range
- Starting rental rates for Class “A” space have seen a year-over-year growth of 20%-25%, with further growth expected during 2015
- VC activity is weak, but IPO activity stays strong
- $3.8 billion of VC dollars were invested into the national biotech sector during the first half of the year, on pace to surpass the 2007 record of $6.0 billion
- San Diego had 8 VC deals completed in Q2-2015, totaling only $55 million in capital raised. This accounted for a 63% decrease in dollars invested from Q1-2015
- San Diego had 4 companies IPO during the first half of the year – Tracon Pharmaceuticals ($36M); Cidara Therapeutics ($77M); aTyr Pharma ($75M) and NantKwest ($207M). The NantKwest IPO gave the company a $2.6 billion market cap and represented the largest ever biotech valuation for a company with no approved drug.
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