EvoNexus to Close Downtown Incubator, Consolidate in University City

EvoNexus, San Diego’s nonprofit tech incubator established seven years ago, is closing its downtown offices and consolidating its operations in a newly revamped space in University City, a suburban neighborhood about 13 miles to the north.

The pro-bono incubator program, which provides tech-oriented startups with free office space and related amenities, has helped re-energize the tech startup community in San Diego. While demand for prime commercial office space has been heating up in San Diego, EvoNexus CEO Rory Moore insisted the move “was our decision.” He characterized the consolidation, set for Nov. 1, as a prudent move to manage costs.

Moore said he’s been working on the consolidation with the Irvine Company, the private developer that has provided EvoNexus with prime commercial office space in three locations—University City, Downtown, and near UC Irvine, about 80 miles north of downtown San Diego. Even though the rent is free, Moore said EvoNexus still pays for Internet expenses and other overhead costs that add up.

“We wanted a facility that was large enough to get all our startups under one roof,” Moore said. “Focusing our resources on startups at one location is very efficient.”

The consolidation also comes at a time when Moore says he has added several prominent tech leaders to the EvoNexus team, although the extent of their involvement remains unclear. The new recruits include the Silicon Valley entrepreneur and former Qualcomm executive Steve Poizner as chief strategist. (In June, Poizner unveiled an initiative to strengthen the startup ecosystem throughout Southern California). Other new EvoNexus additions include former ViaSat patent manager Steve Pateros as chief technologist and former Qualcomm senior engineering vice president Ziad Mansour as chief engineer.

Also, Derek Aberle, who recently disclosed his resignation as president of Qualcomm (NASDAQ: QCOM), has joined the EvoNexus board of directors.

Moore said he has been working with the Irvine Company “for the past several years” to develop a customized tech incubator in University City. The remodeled space consists of 18,000 square feet, with 2,000 square feet of common area, and currently houses 18 startups, he said. The downtown incubator has 16 startups in about 12,000 square feet, although only 10 will be making the move to University City, Moore said. At least four already planned to leave, he explained. In University City, two startups plan to move out before the consolidation.

After opening its first incubator in University City in 2010, EvoNexus opened its downtown facility less than two years later, on the second floor of an Irvine Company-owned office tower at 101 West Broadway. “Downtown needed a shot in the arm,” Moore said. “The Irvine Company and Evo decided to launch a software incubator to be a catalyst.”

He added later that the downtown incubator “was really done to cater to the software guys, and it did,” Moore added. “It got downtown more tech-friendly.”

Many startups that graduated from the downtown EvoNexus incubator leased nearby office space, and other software companies were likewise attracted to the bustling urban center. Commercial co-working spaces also flocked downtown, including DeskHub, Downtown Works, WeWork, Union Cowork, and the Vine, a co-working space the Irvine Company created on floors above the EvoNexus incubator.

“Downtown obviously has been seeing a lot of activity in the past year or two,” said Michael Combs, a research manager in San Diego for the commercial real estate company CBRE. The overall vacancy rate for downtown commercial office space is just under 10 percent, Combs said. The vacancy rate for premiere “Class A” space is 7.3 percent. “That’s really tight,” he added. “Any time you have limited space like that, your options are limited.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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