San Diego Office Market Report

Vacancy steady despite tapering leasing volume. Class A demand has fueled declining vacancy in San Diego since mid-2023; however, that trend appears to be softening. The metro recorded the smallest vacancy compression among major West Coast markets during the year ended in June, largely because net absorption of Class A space weakened relative to recent years. Total leasing volume also fell roughly 20 percent during the year ended in September, with smaller commitments across a diverse mix of tenants driving activity. Still, notable renewal activity and a virtually nonexistent 2026 delivery slate should provide some near-term stability to the metro’s vacancy rate.