San Diego Office Market
The average monthly asking rate ticked up two cents to $3.39/SF from last quarter, down two cents over the past year. Net absorption was positive this quarter, totaling 267,944 SF, largely due to the completion of Breakthrough Properties’ three-building, 400,000-SF Torrey View project, which delivered fully leased. Total vacancy was 17.0%, up 150 basis points over the past year. A record amount of newly delivered space, roughly half of which was vacant, helped drive the rate higher. Construction has fallen from its all-time high after 1.1 MSF of new projects delivered, the highest quarterly total in over a decade. 5.2 MSF remains under construction. Sublease availability fell to 4.1%, down 20 basis points from the previous quarter.
San Diego Industrial Market
The average asking rent fell $0.03 this quarter to $1.50/SF/Month NNN, unchanged from 12 months ago. Asking rates appear to have lost steam amid rising vacancy. Net absorption was negative for the sixth consecutive quarter, posting 125,902 SF in losses, and total vacancy increased to 5.8%. Net absorption in the first half of 2024 totaled 273,071 SF in losses. Sublet availability reached its highest level in a decade, with 2.6 MSF. Direct availability comprises 11.3 MSF. Construction levels have fallen from the all-time high in 2021 but remain elevated by historical standards with 2.8 MSF underway after 282,184 SF delivered this quarter.