May 13, 2016
The San Diego office market improved, as overall vacancy fell to 12.5% in Q1 2016, a new post-recession low. CBRE reported the improvement was driven by more than 660,000 square feet of quarterly positive net absorption, which exceeded total net absorption in all of 2015.
The market for Class A office space continued to tighten, driving demand for Class B product, which accounted for 59.9% of the overall net absorption. In central coastal submarkets, record rents were achieved, signifying declining supply amid continued demand for space. Sales activity was strong in the first quarter with $648.5 million in volume, according to RCA, greater than both Q4 2015 and Q1 2015.
CBRE’s Jeff Oesterblad says, “The San Diego office market is healthier than it has been in years, with nearly every Class A and Class B submarket in the county being at, or near, peak historical rents.”