Life science and biotech companies continue to expand to San Diego, with China-based Wuxi Apptec the latest company entering the life science cluster, said JLL Senior Vice President Grant Schoneman, who specializes in life science real estate.

The attraction is the cluster’s large pool of highly educated STEM (science, technology, engineering and mathematics) professionals and an entrepreneurial, innovative environment for growing companies and startups with a track record for significant discoveries, which have resulted in $56B in mergers and acquisitions since 2011.

Another major acquisition may be in the works, as there are rumors that AstraZeneca may be considering acquisition of San Diego-based Acadia Pharmaceuticals, industry source BioSpace reports.

A total of 24 lease transactions were completed in the region’s life science sector in Q2, for a total of 644,212 gross SF, resulting in 205,529 SF of positive net occupancy growth, according to JLL’s latest Life Science Insights report.

Leasing activity caused the life science cluster vacancy to drop 0.9% to 9.9% overall (6.7% direct, 3.2% sublet) — a 160 basis point decrease year-over-year. The largest transactions were Takeda (163,648 SF), Neurocrine Biosciences (144K SF), Wuxi Apptec (68K SF), Synthetic Genomics (58,863 SF), Halozyme Therapeutics (58,760 SF), BioAtla (20,825 SF) and Metacrine (20,475 SF).

Illumina’s new 316,262 SF i3 campus was delivered in the second quarter, and the report noted more new supply of research space is expected to come online in the second half of the year. A 50K SF building on a 124,303 SF office campus acquired recently by HCP will be converted to life science research space, and local developers are evaluating options for repositioning industrial and office buildings into research space to meet the sustained demand and growth within the life science industry.

Over the last decade, the San Diego region has experienced 36.5% growth in employment by biotechnology and technology companies, including Qualcomm, ViaSat, Mitchell International, General Atomics, Sanford-Burnham, Illumina, Pfizer and Salk Institute, according to a JLL Snapshot on STEM professionals. Life science and biotech companies provide jobs for approximately 50,000 local workers.

This growth is directly attributable to the region’s large STEM talent pool, which is the key attraction for life science companies entering the market, Schoneman said. He said San Diego is a leader for Southern California STEM graduates, awarding nearly 5,000 degrees in the four fields last year alone.

The Academic Ranking of World Universities recently ranked UC San Diego the 15th-best university in the world. UCSD graduates three times the national average for STEM graduates, and it graduates more female STEM professionals than any other U.S. university, according to BestColleges.com. Additionally, the UCSD Jacobs School of Engineering is No. 1 in the UC system for engineering graduates, awarding 3,233 degrees in 2016, 1,692 of which were at the master’s and Ph.D. levels. Overall, 14.3% of the San Diego region’s population has attained a graduate degree.

The region’s collaborative research environment, which includes 600 life science companies and 80 research institutes, is also a major attraction, as is the cluster’s 14.2M SF of highly amenitized research facilities.

“Life science real estate developers are producing very cool research campuses, which provide access to a number of valuable amenities that help to produce a stronger feel of community and collaboration within the local biotech sector,” Schoneman said.

He noted amenitized research campuses are now essential to recruiting talent.

San Diego’s mild climate, quality of life and relatively lower cost of housing compared to the San Francisco Bay Area are also recruiting tools for companies locating research facilities here. But San Diego is a better deal from a business standpoint, he said. Schoneman said professional salaries in the Bay Area are inflated due to the high cost of housing and research space rents are in the mid-$5/SF range, compared to the low $4/SF range in San Diego.