July 18, 2016
The latest CBRE research for the second quarter shows asking lease rates for the San Diego office market office continued to climb to a new historical record high of $2.73/PSF. Several large move-outs in Central San Diego resulted in negative net absorption for the quarter and a slight increase in vacancy.
Overall, fundamentals in the San Diego office market remain strong as year-to-date net absorption surpassed total net absorption for 2015 and overall vacancy remained near pre-recession levels.
CBRE’s Matt Carlson says, “In the absence of new development across the county, rehabilitated and repositioned assets are seeing the greatest activity and increased rental growth.”
Additional highlights of Q2:
- The asking rate increased 2.6% quarter-over-quarter and increased 9.2% year-over-year to $2.73
- Average asking rates decreased year-over-year in six of the 28 office submarkets, showing this theme is affecting the majority of the market
- Class A rates increased 9.7% year-over-year, the largest increase of all classes
- Overall vacancy increased 20 basis points (bps) quarter-over-quarter to 12.6%
- Negative net absorption drove vacancy up in Central San Diego 70 bps quarter-over-quarter to 12.4%
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