Kidder Mathews’ Q1 2017 San Diego office report reveals that the market started the year with strong leasing activity, high net absorption and increasing rental rates. A strong local economy and increasing job growth are expected to drive the CRE market in 2017.
Kidder Mathews notes that tenants remain focused on value, looking for real estate opportunities to increase employee engagement, provide access to amenities and positively impact employee recruitment. This has led to the trend of repurposing older buildings, and adding in creative office upgrades.
The notable highlights from the Q1 office sector include:
- Vacancy rate (3%), decreased 110 basis points, YOY
- Class A net absorption of 54,000 square feet, in spite of nearly 514,000 square feet of leasing activity
- Average office lease rates for Class A, $3.18-per-square-foot FSG
- Strong leasing activity of more than 1.1 million square feet in Class A and B
- Total space available decreased to 13.5 million square feet, dropping total availability to 13.9%, the lowest level since Q3 2006
- Investment activity of $320-million from 39 transactions Q1 2017
For comments, questions or concerns, please contact Dennis Kaiser