X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SAN DIEGO-A new report says that strong demand from local high-tech and biotech firms has pushed the county’s office vacancy rate to a record low of 5.4%.

The vacancy factor at the start of the third quarter was barely half the level of 10.3% reported a year ago, according to the new report by real estate services giant Grubb & Ellis. Absorption totaled more than 2.7 million sf in the first half of this year, greater than the total absorption in all of 1999.

“Tenants of all sizes will be faced with a tremendous challenge in theirsearch for new space,” says David O’Rell, research analyst for Grubb & Ellis. “With only 1.9 million sf under construction,the number of opportunities will remain rather limited—especially fortenants requiring more than 20,000 sf.”

The consolidation of dot-com ventures apparently hasn’t chilled the market, O’Rell adds. The amount of space available for sublease by companies that have pulled out of a building has held steady at about 300,000 sf, he says.

The dropping vacancy factor is pushing lease rates up quickly. In hot submarkets such as Del Mar and University City, monthly askingrates have surpassed $3 psf full service. In some micro-markets, ratesare rising 5 or even 10 cents psf per month, O’Rell adds.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.