San Diego Real Estate Market Reports

San Diego Office Market

The average monthly asking rate increased to $3.50/SF, up 3.8% over the past year and an all-time high, driven by rising availability in newer, more expensive properties. Net absorption was negative for the first quarter, logging 102,633 square feet in losses as leasing demand and activity remained low. Total vacancy climbed to 18.9%, an all-time high fueled by large deliveries and negative absorption. A record 1.8 MSF of new office space delivered during the first quarter, most of it vacant and located in Downtown. Sublease availability totaled 2.4 MSF, down from last year’s all-time high of 3.2 MSF. Though, this modest decline in sublease availability was more than offset by increasing direct availability.

San Diego Industrial Market

The average asking rent fell to $1.45/SF, down 5.3% over the past year, as rising vacancy has weighed on asking rates. Total vacancy climbed to 7.3% as net absorption posted 373,966 SF in losses for the first quarter. Vacancy is at its highest rate since 2014. Sublet availability fell to 3.0 MSF, down 412,359 SF from the all-time high set last quarter. 256,796 SF of new projects delivered in the first quarter as under-construction activity fell to 1.3 MSF, down from 2.9 MSF in the first quarter of 2024. Developers are starting few new speculative projects as market demand has failed to keep up with new supply for nine consecutive quarters.

San Diego Life Science Market

Asking rents in the core submarkets declined 2.7% over the past year to $5.60/SF. Rising vacancy rates and elevated sublease availability have put downward pressure on landlords over the past year. Net absorption was negative, posting 462,634 SF in losses during the first quarter. Total vacancy climbed to 21.4%, the highest level in 20 years, driven by negative absorption and new deliveries. Sublease availability climbed to 1.7 MSF, representing 7.8% of existing inventory and an all-time high. 2.0 MSF of construction is currently underway in the core submarkets after 561,659 SF delivered in the first quarter.