San Diego Office Market Report Q4 2019

In the fourth quarter of 2019, San Diego’s office market rental rates slightly increased from $2.85/SF to $2.89/SF, while the vacancy rate ended the quarter at a post-recession low. Even while showing signs of downtrend, annual rent growth ended the year above the historical benchmark for the third straight year. This is the second quarter since 2018 that posted negative absorption at 205K SF.

2019 ended with it’s lowest vacancy rate, at 9.6% in more than a decade and an equally low availability rate. San Diego’s diversified tenant pool, low vacancy rate and secure rent growth continue attracting capital. Market cap rates remained at 6.1% and market prices exceeded $330/SF.