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California  + San Diego  + Industrial  | 
Sitex Group Purchases 210,000-sq North Bergen Warehouse

Second Quarter Industrial Absorption is Highest Ever Recorded

Cushman & Wakefield recently published the second quarter San Diego market reports for the office, industrial and medical office sectors. Most sectors report positive conditions going into the third quarter.

Direct office vacancy excluding sublease was 14 percent, up 10 bps quarter-over-quarter and 150 bps year-over-year. Tenants absorbed 324,000 square feet in second quarter 2021, marking the second consecutive quarter of positive absorption since the beginning of the pandemic and bringing year-to-date occupancy gains to 536,000 square feet. Overall leasing activity trended upward in second quarter 2021 at 1.1 million square feet. Countywide average asking rent across all classes increased 0.9 percent year-over-year to $3.43 per-square-foot, while class-A average rent increased 2.6 percent year-over-year to $3.88 per-square-foot.

Meanwhile, industrial tenants absorbed 2 million square feet in second quarter 2021, the highest level of absorption ever recorded. The majority of occupancy gains were recorded in North County (1.2 million square feet) with 57 percent of the quarterly absorption total. Direct industrial vacancy was 2.9 percent, a 120 bps decrease quarter-over-quarter and 190 bps from a year ago. Countywide average asking rent for all product types combined was $1.16 per-square-foot, up 4.5 percent quarter-over-quarter and up 5.5 percent year-over-year.

San Diego’s medical office direct vacancy was 6.2 percent at the end of second quarter, a decrease of 20 bps from first quarter 2021 but an increase of 80 bps from a year ago. The market absorbed 119,892 square feet as all classes experienced positive absorption. Class A absorbed 95,538 square feet, primarily as a result of the delivery of a 90,000-square-foot build-to-suit project for Kaiser in Kearny Mesa.

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About Lisa Brown

Lisa Brown has decades of experience in corporate communications and marketing management with organizations including Coldwell Banker Residential, Grubb & Ellis, Marcus & Millichap, NAIOP, SIOR and ALM. In those positions, she worked in conjunction with chief executive officers and chief marketing officers to create corporate messaging, cohesive branding standards, strategic marketing plans and thought pieces. Brown is a frequent speaker at industry events and an editing adjunct professor for an online course. She has a master’s degree in mass communications from San Jose State University.

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