Life Sciences Update | 2022 October

FAST FACTS 5

San Diego

Market Summary

Public & Private Funding (2022)

Rent vs. Vacancy Comparison

Fast Lab Stats

• San Diego continues to strengthen its position as one of North America’s largest life sciences markets with its core 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. • As of second quarter 2022, there was 3.7 msf (21 buildings) under construction countywide, with 31.8% pre-leased. The majority or 72.0% of inventory was speculative with the remaining 28% build-to-suit (BTS). • Life sciences acquisitions, conversions and redevelopments continue to try to meet the high demand in San Diego, including rising interest in North County flex properties for cGMP conversions and Breakthrough Properties’ purchase of projects in Governor Park and Sorrento Valley in the second quarter.

Company Resilience

Deal Type

Completed Type

$ Raised (MM)

$25 $30 $35 $40 $45 $50 $55 $60 $65 $70 $75

12%

21.1 MSF Market Square Footage $68.16 $ Per SF 5.7% Vacancy 46.5K Total Life Sciences

Later Stage VC Jun 2022 VC

$625.0

Aspen Neuroscience

10%

Early Stage VC May 2022 VC

$147.5 $104.0 $102.0

Vacancy Rate

Nalu (NAS: NALU) Later Stage VC Feb 2022 VC

8%

Plexium

Later Stage VC Feb 2022 VC

Endeavor BioMedicines Alterome Therapeutics Replay Therapeutics Epic Sciences

6%

Early Stage VC Jan 2022 VC

$101.0

4%

Early Stage VC Jan 2022 VC

$63.8

Average Asking Rent $/sf

2%

Seed Round

Jul 2022 VC

$55.0 $43.0 $40.0 $40.0

Later Stage VC Apr 2022 VC Early Stage VC Feb 2022 VC Early Stage VC Mar 2022 VC

0%

1859

Employment 20.8% Life Sciences Employment 10-Year Growth Rate

2015 2016 2017 2018 2019 2020 2021 2022

Creyon Bio

Asking Rents

Overall Vacancy

Sublease Vacancy

Representative Investment Sale Transactions (2022)

Address

Type

$ MM RBA SF

Date Buyer

BMR Portfolio: Pacific Center, Nancy Ridge, Waples, Sorrento Valley, Bunker Hill

Lab/Flex

$464.3 642,886 Jan 2022 Oxford Properties Group

6200 & 6220 Greenwich Dr

Office

$145.0 212,201 Apr 2022 Breakthrough Properties

Representative Life Sciences Companies

Life Sciences Labor: Average Monthly Job Postings and Hires

4174-4206 Sorrento Valley Blvd

Industrial

$48.0 91,669 Apr 2022 Breakthrough Properties

6138-6150 Nancy Ridge Dr

Lab

$34.0 59478 Feb 2022 Sterling Bay

Company

Type

10509 Vista Sorrento Pky

Office

$24.0 78,000 Jan 2022 Healthpeak Properties / Trammel Crow

1,000 1,200 1,400 1,600 1,800

Illumina

HQ

10256 Meanley Dr

Office

$20.5

54,664 Jan 2022 Alexandria Real Estate Equities

Scripps Research HQ

1695 Faraday Ave

Industrial

$19.0 63,062 Jun 2022 LPC/Angelo Gordon

Pfizer

Regional R&D Center

10260 Meanley Dr

Office

$16.3

45,306 Jun 2022 Alexandria Real Estate Equities

5550 Oberlin Dr

Industrial

$15.0

22,319 May 2022 BioMed Realty

BMS/Celgene

Regional R&D Center

0 200 400 600 800

5931 Priestly Dr

Industrial

$14.0 52,777 Apr 2022 Luminous Capital/Virtus Real Estate

Lilly

Regional R&D Center

Representative Lease Transactions (2022)

Dexcom

HQ

Company

Address

Size (SF) New/Renewal 535,000 New Lease 426,927 New Lease 318,000 Renewal 205,666 New Lease

Type

Quarter

Landlord

Vertex Regional

R&D Center

2018

2019

2020 2021

2022

Neurocrine Biosciences Bristol Myers Squibb

6040 Edgewood Bend Ct 10010 Campus Point Dr

Office/Lab

Q1 Q1 Q1 Q1 Q1 Q1

LPC

Takeda

Regional R&D Center

Lab

Alexandria CapitaLand Alexandria Alexandria

Hires Unique Postings

Quidel

HQ

Becton, Dickinson and Company 10020 Pacific Mesa Blvd

cGMP

Singular Genomics Systems, Inc. Singular Genomics Systems, Inc.

10933 N. Torrey Pines Rd 3010 Science Park Rd 12390 El Camino Real

Lab Lab

Hologic

Regional R&D Center

Bio Degree-Awarding Institutions, Metro Area

Annual Life Sciences Degree Completions

76,788 Renewal 72,534 New Lease 66,244 Renewal 64,652 New Lease 61,618 New Lease 44,681 Renewal

Halozyme Therapeutics

Office/Lab

Kilroy

$2.4B University of California, San Diego $776M Scripps Research Institute Top NIH-Funded Institutions (2018-2022)

2010 2,763 2020 5,432 Up 97%

•

University of California San Diego California State University San Marcos

Catalent

7330 Carroll Rd

Lab Lab Lab Lab

Q2

Alexandria

PetDx

9980 Huennekens St 2110 Rutherford Rd 3530 John Hopkins Ct

Q1

Bioscience Prop. Blackmore Co.

•

$288M Salk Institute for Biological Studies

Thermo Fisher ImmunityBio

Q2 Q2

•

National University (California)

Alexandria

Research Contributors

Justin Balagtas justin.balagtas@cushwake.com

Jolanta Campion jolanta.campion@cushwake.com

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

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/ CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER