2022 Q3 Office San Diego Region
- San Diego County recorded overall negative net absorption of just over 139,000 SF. While most submarkets recorded positive net absorption, a few submarkets such as Downtown and Scripps Ranch posted significant negative absorption.
- Office demand has been generally trending positive with 1.1 million SF of net absorption over the last twelve months.
- Countywide overall vacancy increased 17 basis points (BPS) in Q3, bringing increasing vacancy to 12.63%.
- Office inventory in the North City and I-15 Corridor markets continues to decline as office projects are converted into life science/wet lab space.
- Countywide asking rental rates decreased slightly in Q3 to a monthly “full service” average of $3.02/SF across all classes and $3.54/SF for Class A space. This equated to year-over-year (YoY) increase of 0.3% and 1.3%, respectively.
San Diego office market continues down the road to recovery
San Diego County has been challenged by many of the same economic headwinds that most of the country is coping with. Inflation, gas prices, housing costs, and economic uncertainties are often as bad – if not worse – than other areas of the country. But the post-pandemic recovery has seen increased employment across most local industries and especially in those that employ office workers. This has translated into 1.4 million SF of net absorption in the last year-and-a-half, effectively recovering two-thirds of the space lost since the beginning of the pandemic.