IRR-San Diego Mid-Year Viewpoint 2015 Local Market Report - Office
As we have discussed in previous Viewpoint publications, the Class A office market recovered much quickly following a flight to quality. Since the end of the last recession, this particular segment of the market continues to experience decreasing vacancy rates at a rate faster than Class B space. The markets with the lowest vacancy rates include UTC and Del Mar Heights (where speculative development is taking place) as well as Sorrento Mesa (where the biotech industry continues to thrive).
A notable trend in the marketplace is that rents are increasing significantly. Leases that were signed at the bottom of the market are now expiring, leading to increases to market. This is consequently driving up rents and property values.
Another notable trend in the San Diego office market is the redevelopment of older office buildings (and functionally obsolete industrial buildings) into high-tech office space.
Lastly, as we continue on into 2015, much of new leasing and sale activity is projected to occur in the I-15 Corridor. According to market research and data from JLL, over 750,000 square feet of office space has been signed or are in negotiations. An additional 600,000 square feet has been purchased by owner-users. Factors such as larger space, lower rents, and employment base will continue to drive activity in this market. Overall, the San Diego office market continues to improve, and is expected to do so over the next 12 to 36 months.
Download the full version PDF of this Local Market Report below to see the charts, graphs, and tables not included above.
IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.