By most measures, San Diego’s office market enjoyed a healthy 2019. Net absorption was positive, rent growth remained above the long-term average and speculative development finally returned to the Downtown submarket.
And to top off 2019, Apple signed two big leases in the fourth quarter in the University Town Center submarket, cementing its status as the employment hub of San Diego.
While two speculative development projects bookended the year, one in Little Italy and the other in Del Mar Heights/Carmel Valley, construction remained heavily tilted toward build-to-suit projects for tech tenants. The lack of supply pressure helped support a decade low in the vacancy and availability rates in 2019.
Office investment heated up in the core tech and life science submarkets in 2019, with huge deals recording in UTC and Sorrento Mesa. One of those sales was the largest office transaction in San Diego in 20 years.
CoStar’s latest San Diego video update explores the office market in 2019 and looks ahead to 2020.