The San Diego industrial real estate market powered through the fourth quarter, according to a recent report from Cushman & Wakefield. Overall occupancy increased by over 850,000 square feet countywide in Q4, marking the 10th consecutive quarter of occupancy gains since the beginning of the pandemic. In addition, the vacancy rate declined 10 basis points annually, ending the year at 2.4%.

New leasing activity, excluding renewals, totaled 989,000 square feet in the quarter across 34 deals, a slight drop-off from Q3. Demand was strongest in Oceanside, which accounted for 26% of the transactions while Otay Mesa was #1 annually, tallying 32% of the new leases for 2022.

Asking rents continue to climb, standing at $1.47 per square foot per month on a triple net basis, up 3.2% compared to Q3, and a jump of 16.1% year-over-year. Cushman & Wakefield’s leasing outlook remains bullish, especially in the 10,000 to 50,000-square-foot range, saying many tenants are actively searching for space.