Newmark Grubb Knight Frank Releases Q3 2012 Office Report for the San Diego Office Market

The San Diego office market continued to march its way toward recovery as the vacancy rate fell 30 basis points from the previous quarter, as reported in Newmark Grubb Knight Frank’s Third Quarter San Diego Office Market Report. This improvement in occupancy levels has helped to prop up asking rental rates, especially for Class A space, which is the direct result of the demand coming from the flight to quality. The vacancy rate for Class A dropped 240 basis points from one year ago. Rental rates are expected to rise.

Key statistics for the San Diego office market during the third quarter of 2012 are as follows:
• The San Diego office market vacancy decreased for the third consecutive quarter to 15.7%.
• The region experienced roughly 214,000 square feet of positive net absorption during the quarter, raising the year-to-date absorption total to more than 1.4 million square feet.
• Quarter-over-quarter, monthly asking rental rates for Class A space increased $0.08 to $2.63/sf. Asking rental rates for Class B space remained largely unchanged, edging up $0.01 to $1.94/sf.
• Two notable transactions of the quarter were Qualcomm’s lease of 76,000 square feet of office space at San Diego Tech Center in the Sorrento Mesa submarket. In Del Mar Heights/Carmel Valley, Latham & Watkins leased 69,736 square feet at Del Mar Corporate Plaza.
• Approximately 813,000 square feet of space remained under construction at the close of the third quarter.

Steve Wolf, senior managing director for Newmark Grubb Knight Frank’s San Diego operations, says, “With Class A rents picking up, there is a renewed momentum driving demand for office space, especially in Class B space, which presents the best opportunity for tenants to get quality space at lower rates.”

Expect the San Diego economy and office market to continue on the path to recovery through the next several quarters as the vacancy rate gradually heads lower, toward 14.0%. Rental rates are expected to rise as the economy gains more strength.

To access the full San Diego office report, visit /research

To speak with one of the company’s local market experts, please contact Mira Matic at mira@miramaticpr.com.

About Newmark Grubb Knight Frank
A part of BGC Partners, Inc. (NASDAQ:BGCP), Newmark Grubb Knight Frank is one of the largest commercial real estate service firms in the U.S. It brings together the strategic consultative approach to creating value for clients and leading position in the New York market that are hallmarks of Newmark; the complementary strengths of Grubb & Ellis in leasing and management, investment sales, valuation and capital markets services; and BGC’s financial strength, proprietary technology, expertise in global capital markets and deep relationships with many of the world’s leading financial institutions.

Newmark Grubb Knight Frank, together with its affiliates and London-based partner Knight Frank, employs more than 11,000 professionals, operating from more than 300 offices in established and emerging property markets on five continents. This major force in real estate is meeting the local and global needs of tenants, owners, investors and developers worldwide.