November 2, 2016
San Diego offers an affordable real estate market compared to other major tech cities, making it a prime expansion or relocation location for tech companies. CBRE’s annual Tech-Thirty list analyzed 30 leading tech markets in the U.S. and Canada for high-tech software/services job growth.
CBRE’s Andrew Ewald says, “We continue to see consistent, steady growth in tech related companies in San Diego, primarily in the UTC, Sorrento Mesa, and Downtown submarkets.”
Ewald noted there is organic growth from local companies as well as expansion by companies into the market that are drawn to a “strong millennial labor pool,” as well as “moderate office rent growth.”
- San Diego’s high-tech sector jobs grew 8% from 2013 to 2015
- The emerging tech sectors are cybersecurity, big data analytics and robotics
- Over the past five years, the software/services industry created 780,000 new jobs at a 7.3% growth rate, and accounted for nearly 20% of major leasing activity
- Sorrento Mesa was San Diego’s top tech submarket with an average annual asking rent of $36.12 psf, and a vacancy rate of 19.1%, a 13% increase from last year
- Sorrento Mesa ranked 20th in the top tech submarkets in terms of office rent growth
- Downtown San Diego is catching up as developers are now offering amenities that cater to tech tenants with creative work environments and more competitive office price
- Overall, San Diego ranked 11th in office rent growth, growing 13.6%
- Average asking rent was $32.71 psf, the vacancy rate remained the same as last year at 12.6%, and there was 600,000 square feet of space under construction.
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