California CRE News In Your Inbox.

Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.

Sub Markets

Property Sectors

Topics

California  + San Diego  + Office  | 
Matthew Real Estate Investment Services has established an office in San Diego and plans to hire 50 brokers over the next 36 months

San Diego Office Development Activity Strong, Deliveries Remain Below Last Cycle

Office developers continue to be bullish about San Diego, say researchers at JLL. Although there’s been a recent uptick of development, deliveries this cycle are still significantly below the last cycle.

JLL compared office development over the past 20 years and found the lack of available land has kept a lid on development of office product. Recent deliveries have kept pace with office absorption, with new supply and demand balanced over the past five years. Vacancy has stabilized at just below 11%, its lowest point since 2007.

The limited supply of large blocks of Class A space, strong recent tenant demand, and rising rents has advanced construction of 16 projects totaling 2.1 million square feet in San Diego. Researchers note, prior to COVID-19, investors had been confident in the market’s office fundamentals.

By comparison, from 2018 to 2020 the average annual square footage under construction total sat near the two-million-square-foot mark, which exceeded the 10-year average of 1.3 million square feet. But even with this surge in development, the current cycle 10-year average is 16% below the previous 10-year cycle of 1.6 million square feet.

But, with the current slowdown in demand and a large amount of product expected to deliver in 2020, vacancy is likely to rise in the coming quarters.

For comments, questions or concerns, please contact Dennis Kaiser

Connect

Inside The Story

Connect With JLL San Diego

About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.

  • ◦Development