2022 Q1 Industrial San Diego Region
- Countywide average asking monthly rental rates increased by $0.02 in Q1 to $1.46/SF triple-net (NNN).
- Overall vacancy fell 38 basis points (BPS) to 2.55%, continuing the trend of the lowest vacancy rate ever recorded.
- Pure industrial vacancy fell below 2% for the first time ever while flex vacancy dropped below 5%.
- Over 1.17 million SF of new construction was completed in Q1 - all of it in South County.
San Diego’s intense industrial demand constrains availability options
Demand in the industrial and flex property segments continues to be the healthiest of all commercial real estate sectors. Industrial and flex vacancy rates are now 1.72% and 4.67%, respectively. Industrial vacancy is so constrained that there are only seven buildings countywide that have at least 50,000 SF of vacant space. Tightening vacancy has resulted in a year-over-year increase in average asking rents of 13%. Flex demand has been strong in life science/wet lab space where office conversions continue to create the most viable options for addressing demand and increasing inventory. New construction alone hasn’t met the current demand in the life science industry sector.