San Diego Tech Leasing Increases During Pandemic

San Diego tech companies have remained active through the pandemic. According to a new report from CBRE, tech companies in San Diego leased 6.8 million square feet of space in the second quarter, a significant increase of 58% compared to the leasing quarterly average in 2019. San Diego was one of only three markets in the US to see an increase in tech leasing in the second quarter.

“San Diego experienced strong activity in the tech sector through 2019, and the start of 2020 has given San Diego good momentum through the pandemic. Our abundant labor pool coming from the major universities helps those businesses to grow. Large users have continued to look at San Diego as a valuable location and can see beyond the pandemic,” Andy Ewald, first vice president in CBRE’s San Diego office, tells GlobeSt.com.

Washington DC and Atlanta were the only two other markets to see an increase in tech leasing activity. For San Diego, the mix of tech companies helped to drive activity. “San Diego has unique concentration and mix of businesses that leverage one another,” says Ewald. “Technology companies have become integrated into all other San Diego businesses such as Defense, Life Science, and e-Commerce. This helps to support the continued growth of tech related companies as they are integral to servicing other types of businesses. San Diego is also a great place to work, and companies can find highly skilled labor that is typically slightly cheaper than other core markets like Seattle or the Bay Area.”

The leasing activity is good sign that the local office market will recover quickly. “Hopefully the strong end to 2019 and good fundamentals carry us through the recovery quicker than other markets,” says Ewald. “I tend to think that our lifestyle and our suburban markets will continue to attract businesses to our region.”

However, it is uncertain if tech leasing will continue to remain active through the end of the year. “It is a mixed bag, as many tech software companies are putting expansion on hold for the near term, as they manage the coronavirus and many adapt to a work from home policy,” says Ewald. “On the other side, there are many software or tech companies that are very active in E-Commerce, Life science, , artificial intelligence, cyber security, defense that are thriving in this disruptive time. Overall activity will be slow through the balance of 2020, but we hope to see positive signs of growth in 2021.”