San Diego Industrial Market Report

Local construction activity contrasts broader national trend. San Diego is grappling with mid-10 percent vacancy for the first time since 2012, yet there is reason for optimism. Tenants absorbed a net of 1.1 million square feet over the six months ending in March. Though this total is tied to an Amazon move-in of similar size near the U.S.-Mexico border, this period ended 11 quarters of net relinquishment. Additionally, leasing activity involving spaces smaller than 50,000 square feet matched the prior six-month span, pointing to consistent demand among smaller users. Headwinds are building, though. Unlike many other major markets, San Diego will not record a significant reduction in supply pressure during 2026. Instead, this year’s delivery slate trails the prior four-year average by just 450,000 square feet, with nearly half the space scheduled for completion available as of April. This will likely moderately increase vacancy over the near term.