Life Sciences in San Diego: Growth Signs Amid Leasing Pressure

San Diego’s life sciences market is sending mixed signals. While leasing activity remains steady and investor confidence is growing, fundamentals continue to favor tenants—and pressure landlords.

According to JLL’s Q4 San Diego Life Sciences report, leasing reached 283,000 square feet across 22 deals, with an average deal size of 12,863 square feet. Early-stage and growth-phase companies led the activity, buoyed by nearly $1 billion in major funding rounds—a sign of long-term confidence in the region’s biotech ecosystem.

Yet in the near term, key indicators suggest caution. The core biotech cluster posted negative net absorption of 173,189 SF year-to-date, and vacancy remains elevated at 27.5%. Class A lab rents declined for the 14th consecutive quarter, settling at $5.86/SF, according to JLL Vice Chairman Grant Schoneman.

“The persistence of landlord competition and generous concessions underscores a tenant-favorable landscape likely to continue into the first half of this year,” Schoneman said.

Investor Activity Grows Amid Smaller Leasing Footprints

Despite soft fundamentals, investor interest appears to be turning a corner. New leases signed during Q4 include:

• Neomorph: 83,354 SF in Sorrento Mesa
• ClearNote Health: 17,704 SF expansion in Torrey Pines
• Protego Biopharma: 12,742 SF relocation to UTC

JLL also announced new leases at Governor Pointe, Breakthrough Properties’ 231,000 SF life science campus in San Diego. Protego Biopharma and AcelaBio signed for 12,742 SF and 7,940 SF, respectively, within the project’s plug-and-play StudioLabs suites.

These transactions reinforce demand for highly specialized, lab-ready environments that support R&D operations, especially in active submarkets like Torrey Pines and Sorrento Mesa.

Capital Support for Infrastructure and Redevelopment

Real estate investment activity is responding to this need. Bolour Associates recently provided a $13M refinance loan through its BA Debt Fund for a two-story R&D facility at 6680 Cobra Way. The 35,462 SF property offers infrastructure suitable for wet labs, including 25’ clear heights, 4,000 amps of power, and full HVAC coverage.

“Our recent loan in San Diego reflects that reality,” said DaJuan Bennett of Bolour. “We’re backing sponsors committed to delivering best-in-class space in a top-tier innovation market.”

Outlook: Flexibility Still Wins in a Tenant-Favored Market

With sustained competition among landlords, concessions and TI allowances are expected to remain common in early 2026. Most active tenants are favoring smaller footprints and flexible terms as they balance growth with operational efficiency.

For now, San Diego’s life sciences real estate market remains strategic but supply-heavy—rewarding landlords who offer high-quality, lab-ready space in top-performing submarkets.