Office and Retail Drive Big Net Lease Gains in San Diego

San Diego

San Diego’s net lease market is thriving. According to a report from CBRE, San Diego led the nation in year-over-year net lease investment volume gains. Office and retail deals were integral to the market growth in 2019. Office sales increased 2.5% and retail sales grew 2.4%. Overall, net lease assets increased 110% year-over-year.

“San Diego is on sale compared to the rest of Southern California, like L.A. and Orange County,” Matt Pourcho, SVP at CBRE, tells GlobeSt.com. “If a deal is a 6% cap rate in Los Angeles, it is a 6.5% to 6.75% cap rate in San Diego. So, San Diego has been trading at a discount to Los Angeles and Orange County, meanwhile the fundamentals of San Diego are unbelievable. We have had new companies come here, and tech and life science are expanding. If you are going to boil it down, the growth is really about fundamentals and yield.”