Report: San Diego Markets Improving

SAN DIEGO-New projections for the metro area predict that a growth in employment over the next year will lead to an improvement in the region’s commercial real estate markets, in particular the office and industrial sectors.

“Locally, San Diego County is projected to add 126,148 new jobs over the next four years, an annual average of 31,537 jobs and a substantial improvement over the past two years,” says Stath Karras, president and CEO of Burnham Real Estate Services. “This will contribute to improved supply/demand balance in the commercial real estate markets – particularly since a limited amount of land will prevent overbuilding,” he adds.

According to a recent report by Burnham, San Diego County’s employment growth increased by an average of 37,600 jobs annually from 1995 to 2001, but then slowed to between 10,000 and 15,000 new jobs in the past two years. As jobs have decreased, so has the leasing activity in San Diego County’s office and industrial sectors, which Burnham’s researchers say is largely due to the curtailment of expansion plans on the part of tenants.

However, “San Diego job growth is gaining momentum, and as companies renew expansion plans, the commercial real estate markets will regain a better supply/demand balance,” according to Burnham’s researchers. They forecast that there will be a total of 3.9 million sf of average annual net absorption in San Diego’s office and industrial sectors for the next four years, based on projections that 25,204 new jobs will be created in San Diego next year and then 33,633 new jobs per year for the three following years.