The True Cost of BSL-2 Buildouts in 2024
With 1.5 million square feet of speculative lab space delivering this year, landlords in Sorrento Valley and UTC are offering unprecedented Tenant Improvement (TI) allowances. But hidden costs remain.
The Current San Diego Market Rate
As of Q3 2024, triple-net (NNN) asking rates for prime lab space in Torrey Pines range from $6.00 to $7.50 per square foot per month. However, Sorrento Valley is seeing aggressive concessions, effectively dropping net rents into the $5.00s when factoring in months of free rent.
Tenant Improvement (TI) Costs for BSL-2
Building out a warm shell into a functional BSL-2 biology lab is capital intensive. In San Diego right now, expect hard costs to range from $250 to $350 per square foot for a 50/50 lab-to-office split.
Where the money goes:
- HVAC and MEP: $100-$150/sqft. BSL-2 requires single-pass air (100% outside air, no recirculation) and specific Air Changes per Hour (ACH). This is your largest single expense.
- Casework and Benching: $40-$70/sqft. Flexible, modular benching has largely replaced fixed casework, allowing reconfiguration without permits.
- Plumbing and Gas: $30-$50/sqft. RO/DI water loops, vacuum lines, and compressed air.
The Permitting Bottleneck
While supply chain issues for chillers and air handlers have eased, the City of San Diego Development Services Department (DSD) remains heavily backlogged. Assume 6-8 months strictly for permitting and entitlement before breaking ground.
Leveraging the Glut
Because landlords are desperate to fill newly completed buildings, TI allowances of $150 to $200 per square foot are becoming common for 7-10 year leases. Startups should calculate their exact runway impact using our Burn Rate Calculator before committing to long-term CAPEX.