San Diego Real Estate Market Reports

San Diego Office Market

The average monthly asking rate ticked up to $3.50/SF FSG, up 1.4% over the past year. Net absorption was positive for the quarter, posting 452,619 SF of gains, closing out the year with 454,885 SF of positive annual net absorption. Total vacancy ticked up 10 bps from the previous quarter to 20.2%, up from 17.0% a year ago. One new project delivered, a 427K-SF build-to-suit project for Bristol Myers Squibb in UTC. Current construction levels have fallen to 942K SF, the lowest since 2018. Sublease availability fell to 2.1 MSF, down from the high of 3.2 MSF in the first quarter of 2024. Most removed sublease listings were withdrawn from the market rather than leased.

San Diego Industrial Market

The average asking rent fell to $1.42/SF NNN, down 3.9% over the past year, the seventh quarter of consecutive decreases. Total vacancy retreated slightly to 7.4%, down from the high of 7.8% in the second quarter. Vacancy has climbed from 2.5% in the second quarter of 2022 as new deliveries outpaced demand, but the market has now stabilized and is beginning to absorb vacant space. Net absorption posted gains of 430,632 SF for the quarter and losses of 485,608 SF for the year. Absorption has been positive for two quarters in a row after 10 quarters of consecutive losses. Developers have started to gradually ramp up construction now that the market is experiencing positive absorption. Under construction activity climbed to 2.1 MSF, up from 1.4 MSF at the start of the year.

San Diego Life Science Market

Asking rents in the core submarkets fell to $5.34/SF, down 7.0% over the past year. Net absorption logged 349,571 SF of gains for the quarter thanks to the delivery of a new 427,000-SF project fully leased to Bristol Myers Squibb. Annual net absorption for 2025 came to negative 132,770 SF. Total vacancy fell slightly to 26.1%, although it is up sharply from 16.5% at the end of 2024 after 2.4 MSF of new, mostly vacant, projects delivered throughout 2025. There is no active construction, and only one 467,000-SF proposed project in the works. Sublease availability fell to 1.6 MSF, although this is considerably elevated compared to the period from 2015 to 2021, when sublease availability averaged less than 500,000 SF.