San Diego Office Space Availabilities Vary Around the County
As you search for available office space in San Diego , you'll encounter a wide variety of rates and availabilities, depending on the area in which you're looking. Currently, just under 3 million square feet of new San Diego office space is under construction or nearing completion, primarily located in Kearny Mesa, Torrey Pines, Scripps Ranch and Rancho Bernardo. Let's take a look at availability throughout the county.
Downtown San Diego
The major construction project to come on line last year was Diamond View Tower at Petco Park , which is now approximately 84% leased. With the new Advanced Equities Plaza standing at 79% leased, full floor office space in downtown San Diego is becoming more limited. Of the nine new downtown office condominium projects, one is nearly 50 percent sold; many of the others are reverting to leasing strategies.
Net absorption has slowed in Mission Valley , like most San Diego markets for office space . The area has seen a rise in sublease space, primarily due to the downturn in residential markets which has caused mortgage and title companies as well as lenders and even some contractors to either downsize or close up shop. Mission Valley 's vacancy rate isn't expected to increase substantially.
This well-insulated sector of San Diego office space has, in the past, been protected from major market swings by virtue of its central location, selection of product, abundance of amenities and ample supply of free parking. Projects like Hazard Center continue to be very successful: they offer a great product with attractive parking and flexible terms that fairly reflect the market.
UTC offers superb amenities and space opportunities, plus easy freeway access to Interstates 5 and 15. And thanks to the completion of additional lanes on the 805/5 merge, commute times have eased between UTC and Del Mar Heights, causing executives who once chose Del Mar Heights office locations because they were closer to their homes to look again at UTC.
Impacted by a notable drop-off in demand for Class A office space , Sorrento Mesa is currently experiencing a large supply of existing blocks of space in the 25,000- to 50,000-square foot range. It seems Sorrento Mesa tenants are resistant to Class A rates; some are choosing to relocate to other nearby markets offering below market sublease options. Currently these include both the Highway 56 and I-15 corridors and the sublease opportunities in UTC and Del Mar Heights.
Leading the market for San Diego office space new construction is Kearny Mesa, with nearly one million square feet under way. Even though a number of office projects have come online at the end of last year and continuing into 2008, office space vacancy is still firmly in the single digits. Even with new projects continuing to come on line, the limited supply of land for new development shouldn't cause much of a spike in vacancy rates.
Highway 56 Corridor
All available office space in San Diego 's newest submarket, the Highway 56 Corridor, is occupied (0% vacancy). No new construction will be completed in 2008.
With the completion of Highway 56, the I-15 Corridor is becoming one of San Diego 's most desirable markets for office space . This major thoroughfare has linked the I-15 corridor communities of Poway , Scripps Ranch and Rancho Bernardo to other parts of the city, showcasing their supply of premium housing, services and amenities. Several new office projects are in the works for Scripps.
The market for San Diego office space is remaining remarkably stable. Despite slowing job growth, the city's diversified employment base is obviously helping the market remain buoyant. To find your next premium office space in San Diego at the most attractive rates, call MBA Commercial today.