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Tim Olson Tim Olson

The Irvine Co. has bee aggressively buying office properties in San Diego this year. In the last 12 months, it has purchased 1 million square feet of office space. In some cases, the investor has purchased properties at record prices and with all cash. While the buying spree is certainly a telling sign of the strength and future growth of the San Diego market, it also could mean that the company will soon have enough market share to control rents.

“Anytime you have an owner that controls that much product in one market, from a tenant and landlord standpoint, they have market control over rents,” Tim Olson, managing director at JLL, tells GlobeSt.com. “Historically, Irvine has managed their buildings more for occupancy, meaning that they will drop rates drastically in a down market. They can also push rates drastically in an up market. From a tenant standpoint, their risk is how high are they going to push rates when vacancy rates begin to decline. In the last downturn, they dropped rents by 100%.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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