SAN DIEGO—Central San Diego's industrial vacancy rate is below where it was at the market's peak in 2006, and there's no more land to build, DTZ's managing director Bryce Aberg tells GlobeSt.com. Vacancy rates for commercial and industrial space in the county have dropped significantly, and the firm believes this is only going to continue for at least the next 18 months. We spoke with Aberg about the shrinking San Diego industrial vacancy rates and the trends he sees emerging from this data.

GlobeSt.com: What trends do you see emerging from the ever-shrinking San Diego industrial vacancy rates?

Aberg: San Diego County vacancy dropped to 5.2% in Q1, 2015, approaching the historic low of 4.4% vacancy back in 2006. We're not at peak lows yet, but we're heading in that direction. We recently completed our 2015-2016 forecast, which looked at the last 40 quarters and correlated vacancy to averaging asking rents. In Q1 2015, Central San Diego vacancy was below historic low levels at 4.1%. By 2016, we're forecasting vacancy to be near 3.5%. Yet asking rents are still 10% to 15% below peak rents … suggesting plenty of room for rent growth in the near term. Part of the problem is the lack of developable land—San Diego has well-defined borders by the mountains to the east, the ocean to the west, Mexico to the south and Camp Pendleton to the north, creating a land-constrained market. The lack of inventory has also pushed sales prices up and also major cap-rate compression on industrial sales