When it comes to San Diego’s office market, there is good news and bad news. The good news: the metro’s robust life science and technology sector will help to fuel leasing activity this year and drive the office recovery. The bad news: the office vacancy rate is at a nine-year high, and new construction deliveries in Downtown San Diego will push vacancy rates higher this year.

Marcus & Millichap research shows the office vacancy rate in San Diego is 16.1%, a 380 basis point increase from 2019. The class-A vacancy rate is even higher at 20.8%. Marcus & Millichap expects the rate to continue to grow another 140 basis points this year to 17.1%, the highest rate since 2009. The cause is largely due to several speculative office developments scheduled to deliver in Downtown San Diego this year. The CDB already has a 26.2% vacancy rate, and the new construction will increase the stock by 2.3%. In addition, another 750,000-square-foot project is schedule to come to market in 2022.

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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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