From Boom to Doom: The Biotech Wet Lab Meltdown—San Diego Market Report

Hughes Marino | Market Reports
May 13, 2025

From 2020-2022, the biotech industry was the standout of the U.S. capital markets, thanks to the vital role the industry played in the Covid-19 pandemic response and the unprecedented capital investment that flowed into the industry for the diagnosis and treatment of all disease conditions. With that fresh capital, biotech companies leased millions of square feet of biotech wet lab space from 2020-2022 in an unprecedented surge that real estate developers and their landlord brokers thought would last for many years to come. In contrast back in 2023, Hughes Marino began sounding the alarms that a perfect storm was on the horizon for the San Diego region’s biotech wet lab market, that would affect all U.S. wet lab markets. That perfect storm would be comprised of 1) changes in the capital markets that would negatively affect demand, 2) growing wet lab sublease inventory that would unexpectedly increase supply and limit landlords’ pricing power and 3) record levels of excessive new wet lab construction and office-to-lab conversions that would exacerbate the supply problem. We forecasted that these factors would collectively lead to a historic wet lab supply and demand imbalance, which is exactly what has occurred.

Demolition and Rezoning: Simultaneously Solving the Office Supply Glut and Affordable Real Estate Shortage

David Marino | Forbes
May 6, 2025

A fundamental tenet of real estate valuation and development is that land gravitates to the highest and best use. The United States has a residential real estate crisis, where Zillow reported in 2024 that there’s a shortage of approximately 4.5 million housing units.