The Relationship Between SD’s Office Classes

Wolf: “The class-B market is not shrinking as much as it is changing into a segment where buildings have to be upgraded to remain competitive.”

SAN DIEGO—As San Diego’s class-A office market becomes tight with high leasing velocity and high rental-rate appreciation, the class-B segment is increasingly becoming more attractive to tenants entering the market, Newmark Grubb Knight Frank’s senior managing director Steve Wolf tells GlobeSt.com. A recent office report from the firm showed that while class-A net absorption activity outperformed class-B activity in Q1, the opposite was true in Q2, with class-B absorption exceeding class-A by more than 7:1 on a square-footage basis. We spoke exclusively with Wolf about the interplay between the two office classes in this market and where he sees them headed.

GlobeSt.com: How do the class-A and class-B office markets in San Diego play off each other?