Commercial Real Estate in San Diego Not Expected to Falter Like the Housing Market
Commercial real estate in San Diego is poised for a healthy performance across all sectors this year, in spite of our temporary housing downturn. The economy is still growing, consumers are still spending and businesses are still investing - all positives for commercial real estate in San Diego. However, trends are not as strong as last year, primarily due to housing's dampening effect on the overall economy.
Every newspaper and radio talk show, every financial institution, city or chamber spokesman has an opinion about San Diego's residential and commercial real estate within the next 12 months. After all, it's an election year - thus both parties are working to ensure the economy grows so that their side can take all the credit.
In San Diego County, we're seeing record spending in commercial building, industrial development, hotel construction, transportation, and even some housing being built. In downtown, two projects have been approved to renovate downtown waterfront real estate. In North County, more than a dozen hotels are being built, led by Sheraton in Carlsbad and Marriott in Oceanside.
The Indian gaming tribes are increasing their own commercial real estate in San Diego, with plans to build bigger casinos, hotels, resorts and shopping. Viejas' project alone could top $800 million; the Pauma Band of Mission Indians is nearing completion on their plans build a new $300 million casino and hotel complex. Pala Casino, Spa and Resort will spend $100 million to expand their casino and parking, and San Pasqual will soon start a 160-room boutique hotel. In Carlsbad, 2 million feet of commercial, retail and industrial space is currently under way and a multimillion-dollar remodeling of the Carlsbad Village is slated to begin this year. Other North County cities - Oceanside, Vista, Encinitas, San Marcos and Escondido - are all experiencing a surge in building and job growth.
On the transportation scene, the San Diego Association of Governments has announced it will spend several billion dollars on freeways, local roadways and transportation projects beginning in 2008, which create lots of jobs. The North County Transportation District is poised to launch the Sprinter, its latest mass transit project. The $500 million project links Escondido to Oceanside, tying riders into the Coaster and bus lines corridor, alleviating at least 10,000 to 15,000 cars traveling daily along Interstates 15, 5 and state Route 78.
The market for commercial real estate in San Diego may not be as strong in 2008 as in other boom years we've seen, but all economic indicators show that the market should remain healthy this year.