San Diego Office Market Report
Life Science and Tech Expansions Serve as the Foundation for San Diego’s Office Recovery
Diverse tenant base drives leasing rebound. Four straight quarters of negative absorption have pushed office vacancy in San Diego County to a nine-year high. Nevertheless, the metro is exhibiting signs of improvement that have the potential to augment office fundamentals. Preliminary leasing data from the first quarter of 2021 reveals a 40 percent rise in executions when compared with the prior three-month period, with biotech and software companies driving leasing activity for spaces larger than 10,000 square feet. Sorrento Valley/UTC/Torrey Pines is the preferred destination for these companies as Apple, Surgalign Spine Technologies, Element Biosciences and TuSimple leased a combined 200,000 square feet in the market over the past three months. Furthermore, Google announced it will occupy additional space in the area. Recent hiring by firms that traditionally use office space suggests companies are expanding and may require additional space once most professionals resume in-office work.