2022 March Life Sciences Update

San Diego

Market Summary • San Diego continues to strengthen its position as one of North America’s largest life sciences market. • The core of its life sciences industry is anchored in the coastal suburb of Torrey Pines, home to UC San Diego and private research institutions including Scripps Research, the Salk Institute and the Sanford Burnham Prebys Medical Discovery Institute. • Continued growth of the industry has been fueled by public, private and academic collaboration; a talented workforce; a high quality of life; and strong anchors such as Illumina, Pfizer, Bristol Myers, Lilly and Takeda. • The region is home to nearly 1,700 life sciences companies and more than 80 independent and university-affiliated research institutes. • The life sciences cluster generates $27.7 billion in gross regional product and $47.8 billion in total business sales. • Limited supply has encouraged developers to search for opportunities beyond traditional life sciences submarkets to convert older buildings to lab or build new speculative projects to meet rising demand. • There are currently 2.3 msf (12 buildings) under construction countywide, with 53.1% pre-leased. By the end of 2022, 533,600 sf (five buildings) are expected to be delivered. The majority or 61% of inventory is speculative with the remaining 39% build-to-suit (BTS). Large tenant activity is expected to fuel life sciences development over the next few years, including the 163,000 sf BTS Sorrento Therapeutics buildings in Sorrento Mesa and the Turning Point Therapeutics lease in Torrey Pines.

Public & Private Funding (2021)

Rent vs. Vacancy Comparison

Fast Lab Stats 20.7 MSF Market Square Footage $51.96

Company

Deal Type

Completed Type

$ Raised (MM)

$60

12%

Erasca

IPO

Jul 2021

Public

$300.0

$50

10%

Resilience

Later Stage VC Jun 2021

VC

$300.0

$40

8%

Element Biosciences

Later Stage VC Jun 2021

VC

$276.0

Vacancy Rate

Design Therapeutics

IPO

Mar 2021

Public

$240.0

$30

6%

Singular Genomics

IPO

May 2021

Public

$224.4

$ Per SF 6.1% Vacancy 33.6K Total Life Sciences Employment & Talent Pool 195% Life Sciences Employment Growth Rate Since 2001

$20

4%

Janux Therapeutics

IPO

Jun 2021

Public

$193.8

$10

2%

Prometheus Biosciences

IPO

Mar 2021

Public

$190.0

Average Asking Rent $/sf

Tyra Biosciences

IPO

Sep 2021

Public

$172.8

$0

0%

2015 2016 2017 2018 2019 2020 2021

Ventyx Biosciences

IPO

Oct 2021

Public

$151.6

Shoreline Biosciences

Early Stage VC Nov 2021

VC

$140.0

Asking Rents

Vacancy Rate

Representative Investment Sale Transactions (2021)

Address

Type

$ MM

RBA SF Date

Buyer

Pacific Corporate Center

Office/Flex Lab Conversion

$579.0

504,750 Dec 2021

Harrison Street Capital / Sterling Bay West

Lusk Business Park

Industrial/Flex Lab Conversion

$315.4

371,280 Oct 2021

Longfellow Real Estate Partners

6260-6350 Sequence Dr

Office/Flex Lab Conversion

$298.5

482,154 Jun 2021

Alexandria Real Estate Equities

The Aventine

Office Lab Conversion

$205.0

281,094 Oct 2021

IQHQ

Centerpark Plaza

Industrial/Flex Lab Conversion

$149.3

255,880 Sep 2021

Longfellow Real Estate Partners

Make & Commerce

Office/Industrial Lab Conversion

$135.5

302,727 Jul 2021

Alexandria Real Estate Equities

Life Sciences Talent Pool

Representative Life Sciences Companies

Pacific Plaza at Torrey Hills

Office Lab Conversion

$123.1

228,601 Apr 2021

Breakthrough Properties

Talent pool includes life science professionals not currently employed in the life science sector

Company

Type

9940-9950 Barnes Canyon Rd

Office Lab Conversion

$115.0

143,999 Dec 2021

BioMed Realty

Illumina

HQ

28,000

10975-10995 Torreyana Rd

Lab

$91.0

84,829 Jun 2021

Alexandria Real Estate Equities

Scripps Research

HQ

Pacific Tech Center

Office Lab Conversion

$46.7

67,832 Jul 2021

BioMed Realty

Pfizer

Regional R&D Center

24,000

BMS/Celgene

Regional R&D Center

Representative Lease Transactions (2021)

Lilly

Regional R&D Center

Company

Address

Size (SF)

New/Renewal

Type

Quarter

Landlord

20,000

Dexcom

HQ

Altos Labs

11255-11355 N Torrey Pines Rd

309,094

New

Lab

Q4

Alexandria Real Estate Equities

Vertex

Regional R&D Center

15,428

Takeda

Regional R&D Center

BD

11220 El Camino Real

218,000

New

Lab

Q4

Breakthrough Properties

16,000

Quidel

HQ

Turning Point Therapeutics

3020-3030 Callan Rd

185,000

New

Lab

Q2

Healthpeak Properties

Number of Persons

Hologic

Regional R&D Center

Tandem Diabetes

12400 High Bluff Dr

181,949

New

Office

Q3

Kilroy Realty Corporation

12,000

Average Annual Growth Rate 2001-2021: 2.4%

Sorrento Therapeutics

4930 Directors Pl

163,205

New

Lab

Q3

Healthpeak Properties

Arrowhead Pharmaceuticals

10102 Hoyt Park Dr

144,113

New

Lab

Q4

Alexandria Real Estate Equities

Top NIH-Funded Institutions (2017-2021) $2.0B University of California San Diego $936M Scripps Research Institute $308M Salk Institute for Biological Studies

8,000

Quidel

2285 Rutherford Rd

128,745

New

Lab

Q1

Alexandria Real Estate Equities

DermTech

12340 El Camino Real

95,997

New

Lab (Conversion) Q3

Kilroy Realty Corporation

2011

2017

2021

2012

2015

2013

2018

2019

2016

2014

2010

2001

2007

2020

2002

2005

2003

2008

2009

2006

2004

Surgalign Spine

3030 Science Park Rd

94,457

New

Lab

Q1

Diversified Healthcare Trust

Bio Degree-Awarding Institutions, Metro Area • University of California San Diego • California State University San Marcos • National University (California)

Boundless BIO

3010 Science Park Rd

80,168

New

Lab

Q4

Alexandria Real Estate Equities

Research Contributors Justin Balagtas justin.balagtas@cushwake.com

Jolanta Campion jolanta.campion@cushwake.com

Sources: Cushman & Wakefield Research, CoStar, National Institutes of Health (NIH), Emsi, Pitchbook

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LIFE SCIENCES 2022 MARCH UPDATE