SAN DIEGO—Downtown San Diego rental rates are up to 25% lower than the highest-quality, newer, class-A-plus office buildings in UTC and are comparable to older class-A office buildings when you figure in parking costs, Colliers International's Ron Miller tells GlobeSt.com. Miller, who is on Colliers' San Diego-region occupier-services team, recently represented Mitek, a global leader in mobile-capture and identity-verification-software solutions, in signing a lease for 29,000 square feet of class-A, ground-floor office space at 600 B St., relocating its current headquarters from 8911 Balboa Ave. in Kearny Mesa to Downtown San Diego. We spoke exclusively with Miller about why companies are beginning to move from San Diego's suburbs to Downtown and how suburban-office landlords are responding to this new trend.

GlobeSt.com: What are the main reasons companies are moving from the suburbs to Downtown San Diego?

Miller: Tenants have a variety of reasons to relocate Downtown, yet all are connected to the area's vibrant community and hub for local businesses. While some may choose to be Downtown for the synergies with clients and vendors, others are attracted to fostering a contemporary and collaborative culture with their physical workplace. Downtown San Diego is home to the most unique office offerings, with high ceilings, open floor plans, industrial style and even historical significance. For example, Bumble Bee Seafoods returned to its roots in Downtown and relocated from Kearny Mesa to the former Showley Candy Factory building because of its heritage and one-of-a-kind attributes.

For these companies, corporate culture extends beyond the walls of the office, and tenants are attracted to the social aspect of the urban experience. Downtown San Diego further enhances the ability to stay connected with colleagues, classmates and business connections through numerous dining and entertainment options and the hustle and bustle of walking versus driving. Additionally, cultural opportunities including the new San Diego County Library, Padres games at Petco Park, Copley Symphony Hall, strolling along the Embarcadero, San Diego's Convention Center, and San Diego Symphony pops concerts all provide avenues for people to interact and connect.

Innovative co-working and incubator spaces are also drawing tenants back to Downtown San Diego. For example, WeWork, the largest and most recent entry into the Downtown co-working environment, will occupy 80,000 square feet at 600 B St. New companies are also being bred here with access to startup venues like EvoNexus and the Collaboratory for Downtown Innovation a joint venture of the University of California San Diego and the Downtown San Diego Partnership.

GlobeSt.com: What are the advantages to tenants of making this move—are Downtown landlords giving them incentives to do so?

Miller: Downtown San Diego's rental rates are 20% to 25% lower than the highest-quality, newer, class-A-plus office buildings in UTC and comparable to older class-A office buildings when you figure in parking costs. Select landlords are offering incentives, whether it is “bundled together” with parking costs, free rent, enhanced tenant improvements or discounted rent, among other offerings.

Some landlords offer a variety of perks such as dog-friendly buildings, complimentary airport shuttle service, discounts to local venues and courtesy shuttle service to various Downtown destinations.

In the case of Mitek, they were curious to make a move to Downtown from Kearny Mesa only if there was a “needle in a haystack opportunity” where their rent was comparable to or less than what they were paying in Kearny Mesa. Colliers' occupier-services team created a solution where Mitek obtained prominent ground-floor presence and direct access to Downtown's only private park, as well as private interior stairs and elevator access to their second floor.

GlobeSt.com: How are suburban-office landlords responding to this new trend?

Miller: Several landlords in the suburban markets are providing repurposed innovative office environments to recreate the urban appeal in the suburban markets. They are specifically targeting companies that want contemporary space yet might be hesitant to make the move to urban markets. Many landlords are creating this urban feel through refurbished industrial buildings with exposed/high ceilings, roll-up glass truck doors, polished concrete floors and amenities such as fitness centers with towel service.

GlobeSt.com: What else should our readers know about this trend?

Miller: There is a plethora of development planned, under construction and underway, with mass transit connecting all points of the Central Business District and beyond. While many tenants have concern over transportation options for Downtown, many new options are making this a concern of the past. Our occupier-services team has developed a comprehensive, interactive map of the transportation options to get Downtown from Inland North County or from South County. For getting around Downtown San Diego, other than the trolley, there are innovative resources like FRED, the free electric-car shuttle, for companies to consider when thinking about relocating Downtown.

GlobeSt.com: What are the main reasons companies are moving from the suburbs to Downtown San Diego?

GlobeSt.com: What are the advantages to tenants of making this move—are Downtown landlords giving them incentives to do so?

Some landlords offer a variety of perks such as dog-friendly buildings, complimentary airport shuttle service, discounts to local venues and courtesy shuttle service to various Downtown destinations.

GlobeSt.com: How are suburban-office landlords responding to this new trend?

GlobeSt.com: What else should our readers know about this trend?

Instant Insights /

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