Tenant's Guide

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San Diego - Q1 2018

Tenant's Perspective

  • Proposed industrial deliveries are the highest they've been in almost 10 years, which should bring optimism for industrial users.
  • Office users seeking space should look into Downtown, North, I-15, & I-5 markets, where vacancies are higher than the county average.
  • With sublease vacancies decreasing in both office and industrial markets, those seeking short term space should allot substantial lead time.
Over the first quarter of 2018, net absorption for the overall San Diego office market was negative 45,213 SF. The average vacancy rate remained at 9.6%, and monthly rental rates increased from $2.66 to $2.68 per square foot.

The overall San Diego industrial market started the year with a net absorption of negative 350,182 SF, while vacancy increased to 4.5% from 4.4%, and monthly rental rates increased from $1.04 to $1.06 per square foot.

Rental and Vacancy Rates

Avg. Rental Rate     Vacancy Rate   Margin
(net rate psf)  
$2.88/SF  
  Downtown Class A Office
8.5% 
  0.2%
$2.37/SF  
  Downtown Class B Office
17.9% 
  4.8%
 
 
$3.25/SF  
  Suburban Class A Office
12.6% 
  0.5%
$2.50/SF  
  Suburban Class B Office
9.6% 
  0.2%
 
 
$1.06/SF  
  Industrial
4.5% 
  0.1%
$0.92/SF  
  Warehouse
3.5% 
  0.0%
$1.51/SF  
  Flex/R&D
7.7% 
  0.6%

Market Trends

Recent Transactions

Tenant Size Submarket Type Sector
TrellisWare Technologies 72,331 SF Scripps Ranch Lease Office
Tocagen 38,849 SF UTC Lease Flex
Vividion Therapeutics 34,054 SF Mira Mesa/Miramar Lease Flex
Avanti Workspace 25,065 SF Carlsbad Lease Office
MSE Express 24,839 SF Otay Mesa Lease Industrial
Winsupply, Inc. 24,553 SF Vista Sale Industrial
Paul Hastings LLP 24,368 SF UTC Lease Office
TGG Accounting 23,000 SF Mira Mesa/Miramar Sale Industrial
AAC Holdings, Inc. 22,486 SF Downtown Lease Office
FBA Forward 21,974 SF Otay Mesa Lease Industrial