San Diego lab vacancy remains near record highs as leasing slows and rents decline

San Diego’s lab vacancy rate is sitting near all-time highs. With 31% of lab space sitting empty, a handful of companies — some international — are swooping in on declining rents and rising landlord concessions. As asking rents decline for the 15th consecutive quarter to $5.55 per square foot, the market remains in recovery mode.

Central San Diego availability and vacancy rates have risen dramatically over the past four years. Since Q3 2021, the market rates have increased from historic lows of 4.2% availability and 2.2% vacancy to near record highs of 27.5% availability and 22.4% vacancy. In San Diego, 30% of labs are empty, driven by vacancy downtown, where only 10% of lab spaces are occupied.

Total leasing activity dropped significantly in the first quarter, with volume falling to 223,000 square feet — almost 50% less than the 2025 quarterly average of 450,000 square feet and the 10-year average of 580,000 square feet. In 2025, leasing activity was slow through the first half, but the second half of the year improved significantly, bringing the 2025 total to nearly 1.14 million square feet. While this is 20% below the 10-year average, it falls in line with historical pre-COVID norms.

The majority of tour activity has come from requirements under 30,000 square feet, which represents over 75% of the current requirements. Despite the large amount of available sublease space on the market, there were only 6 transactions in 2025, 5 of which were under 6,000 square feet in size.

Bigger biotechs are moving into newly constructed buildings in premier locations, like Torrey Pines, Del Mar Heights and University Town Center. In March, Iambic Therapeutics grew its footprint, expanding into a Class A building in Torrey Pines. In the same month, SciThera relocated from La Jolla to a Class A building in Torrey Pines.

Torrey Heights, a new 10-acre life science research campus in Del Mar Heights, reached 100% occupancy in the first quarter. The Alexandria Real Estate Tech Center, a 47-acre, 14-building campus in Sorrento Mesa, also hit 100% occupancy.

Other companies are crossing oceans to plant their flag in San Diego, drawn by local talent and prices of premium lab space. Beijing-based drug innovator Biocytogen announced in March it is opening a new office in Sorrento Valley, and in January, Bora Biologics, based in Taipei, Taiwan, opened its $30 million manufacturing facility in Sorrento Valley.

Much of the vacant space sits in new buildings that went up during the building frenzy of 2021 and 2022, when developers built quickly to meet surging market demand. Availability and vacancy rates are expected to stabilize and gradually decline as funding conditions improve and tenant demand recovers, supported by the lack of new supply expected in the market.