Why Suburban-Office Builds Increased in SD and OC

Ressler: “The advent of changing technology and societal work/live behavior regarding transportation and transit-oriented-development will be seen first in the gateway markets that Orange County and San Diego represent.”

SAN DIEGO—Soaring rental rates, plunging vacancy rates and a lack of land for development opportunities in the central business districts of Orange County and San Diego have forced developers to look outside the urban core to build office product, CommercialCafe’s director of business intelligence Doug Ressler tells GlobeSt.com. According to a recent report from the firm, suburban offices will provide the largest amount of new space to the US office market, with nearly 35 million square feet scheduled for delivery in 2018.

According to the report, in Orange County, Tustin is slated to add one of the largest segments of office space to the market in 2018 with 417,000 square feet, a 28% increase of the city’s office inventory. Meanwhile, San Diego will add four projects totaling 609,913 square feet of office space to the market, only 53,000 square feet of which will be in the Downtown submarket.