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San Diego industrial rents have far surpassed the prior peak. Low finish industrial rents are up 27.6% over rents in 2007, and last year, industrial rents increased 10.2%. This is rapid rent growth, considering industrial rents in the market have grown an average of 7.1% in the last five years, according to research from JLL. New quality product and new demand from a diverse user base has driven the industrial activity. As a result, the asset class has become the darling of the market.

“The downturn we experienced after the last cycle had a deep impact on how owners and occupiers approached real estate,” Andy Irwin, VP at JLL, tells GlobeSt.com. “Occupiers were very cautious with the expansion plans.  It took a few years to go through the glut of inventory left over from the downturn. Additionally, Industrial occupancy and rents usually lag a few quarters behind the other commercial real estate asset classes.  When leasing activity in this cycle started to heat up, it came on quickly with rents growing more than 10% per year in many of the San Diego submarkets.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance writer and editor living in Los Angeles whose work has appeared in such publications as Travel + Leisure, Angeleno and Los Angeles Magazine.

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