Space Absorption Slows in San Diego

Hughes Marino says it expects commercial real estate markets in San Diego County to continue in a recovery phase, following a solid performance in 4Q 2015. The year ended with 670,000 square feet of space being absorbed, bringing the total to 2.7 million square feet for 2015.

While that’s less than what was recorded in 2014 (5.7 msf) and 2013 (3.3 msf), the San Diego-based firm notes that client activity throughout the region gives it no reason for concern. Hughes Marino says it expects to see slower velocity given the lack of space options in 2016, as rental rates rise, ultimately forcing tenants to look in less expensive submarkets.

One notable new high-rise project that came online was Irvine Company’s, One La Jolla Center in UTC, which added 300,000 square feet of inventory to the market.