San Diego Real Estate Market Reports

San Diego Office Market

The average monthly asking rate was $3.45/SF in the fourth quarter, up 2.6% over the past year. This rent growth matched the rate of inflation in the region, meaning rents have remained essentially flat. Net absorption was positive this quarter, posting 336,407 SF, bringing the annual total to 588,521 SF in net occupancy gains. Total vacancy ticked down slightly to 16.8%, down 30 basis points from the previous quarter but up 150 basis points over the past year. No new projects delivered during the quarter, leaving 5.3 MSF of projects under construction, down from the all-time high of 6.7 MSF at the start of the year. Sublease availability fell to 3.2%, although this decline was driven mainly by sublease listings that were withdrawn from the market rather than being leased.

San Diego Industrial Market

The average asking rent fell to $1.48/SF, down 4.5% over the past year as rising vacancy has weighed on asking rates. Total vacancy climbed to 6.9% as net absorption posted 813,915 SF in losses this quarter. Annual net absorption for 2024 was negative 1.1 MSF. Sublet availability reached a new all-time high of 3.4 MSF, up from 2.0 MSF at the end of 2023. 679,723 SF of new projects delivered in the fourth quarter and under-construction activity fell to 1.9 MSF, down from 3.1 MSF in the first quarter of 2024. Developers are starting less speculative projects as market demand has failed to keep up with new supply for eight consecutive quarters.

San Diego Life Science Market

Asking rents in the core submarkets declined 2.7% over the past year to $5.75/SF. Rising vacancy rates and elevated sublease availability over the past two years have put downward pressure on landlords. Net absorption was modestly positive at 82,202 SF for the fourth quarter and 276,042 SF for the year but was outpaced by 774,345 SF of new space that delivered throughout the year. Total vacancy was at 16.3%, slightly down from last quarter’s record high of 16.7% but 200 basis points higher than the end of 2023. Sublease availability fell at the end of the year, mostly due to sublease listings that failed to transact being withdrawn from the market. 2.5 MSF of construction is currently underway in the core submarkets and a further 1.2 MSF of projects are underway in the emerging submarkets.