Article Via: GlobeSt.com
Downtown San Diego’s concentration of high-quality talent has become integral to the expansion of the life science sector in the region. A new report on demographics from The Downtown San Diego Partnership, along with the City of San Diego and San Diego Regional Economic Development Corporation, found that the Downtown San Diego area has an overconcentration of high-skilled talent, which has helped contribute to the expansion of the life science and technology companies, which are rapidly adding jobs and competing for talent.
Downtown San Diego has 70,669 jobs, about 4.2% of the regions total. Professional, scientific and technology jobs account for the vast majority of jobs in the market, more than 13,000 jobs in total. Food services is next with a little more than 10,000 jobs, and the government comes in third, supplying 6,885 jobs in the market.
While the life science and technology sectors contribute the most jobs, Downtown San Diego has a high concentration of low-wage jobs in the leisure, arts and food and beverage markets. The market has double the average concentration of accommodation and food service jobs, and four times the average of arts, entertainment and recreation jobs. As a result, the market slightly underperforms in terms of economic output. While it houses 4.2% of the area’s jobs, it only added $9.8 billion in value to the regional economy, or 4% of GDP, according to the report.
The concentration of life science and technology jobs has also left the market uniquely exposed to the pandemic-related downturn. In 2020, the market lost nearly 10,000 jobs, with the report notes was responsible for “completely undoing the cumulative job growth experienced during the preceding four years.” San Diego County ended 2020 with jobs down .4% compared to 2015, while Downtown San Diego’s jobs were down 4.8% from 2015. From 2015 to 2019, jobs in the area increase 1%.
The job growth has also supported a robust office construction pipeline. There are six office buildings under construction in the market that will add an additional 4.4 million square feet of space, and there are another four proposed projects that would add another 780,000 square feet of space to the market. In terms of life science space,
Downtown is not yet considered a hub for lab space, as is the nearby UTC area. In fact, there are still two life science properties totaling 253,000 square feet in Downtown San Diego that is going largely unused with 70% vacant; however, developers continue to build more lab space. There are currently two projects under construction totaling 377,000 square feet in Downtown San Diego. The development activity is due to strong demand and rent growth, as well as anticipated expansion of life science companies, which took in $5 billion in life venture capital in 2021. In the same year, the greater San Diego life science market recorded 34% rent growth and more than 1 million square feet of leasing activity in both the third and fourth quarter, according to the fourth quarter report from JLL. In 2021, there were 139 life science leases completed in the San Diego market, representing a total of four million square feet, a 51% increase in transactions and an 80% increase in square footage from 2020.
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