2022 Q2 Office San Diego Region
Key Takeaways
- San Diego County has recorded a fifth consecutive quarter of positive net absorption (+555,577 SF), bringing total demand to +1.4 million SF over the last twelve months.
- Countywide overall vacancy decreased 67 basis points (BPS) in Q2, bringing vacancy down to 12.48%.
- Office inventory in the North City and I-15 Corridor markets continue to contract as office projects continue to be converted or renovated into life science/wet lab space.
- Countywide asking rental rates dipped slightly in Q2 to a monthly “full service” average of $3.03/SF across all classes and $3.57/SF for Class A space. This equated to year-over-year (YoY) increase of 2.4% and 2.6%, respectively.
San Diego office market demand surges in Q2
Much of San Diego’s workforce has returned to full-time or even part-time work back in the office after two years of modified work conditions due to the global COVID pandemic. The five-quarter period from Q1 2020 through Q1 2021 saw nearly 2.2 million SF of negative absorption; the subsequent five quarters through Q2 2022 has resulted in 1.4 million SF of positive absorption. This strong recovery has resulted in the occupancy of nearly two-thirds of office space that was vacated since Q1 2020. Increased office demand is expected to continue throughout the second half of the year.
