North County Leads Industrial Activity

North San Diego County lead absorption activity in the second quarter, along with the neighboring I-15 Corridor. According to a new report from JLL, the combined markets accounted for 454,284 square feet of positive absorption. That is especially significant considering that the East County markets had negative net absorption, leading to an overall 179,576 square feet of total absorption for the San Diego market. North County and the neighboring I-15 Corridor are seeing a tremendous amount of new industrial construction, which is helping to fuel leasing and absorption in the two markets.

“Development has been pushed out to the boundaries of San Diego County. Central County is pretty much out of land for industrial development,” Andy Irwin, VP at JLL, tells GlobeSt.com. “North County has projects in all of its submarkets under constriction. In the I-15 Corridor, there are a number of healthcare properties and smaller multi-tenant projects. That is really the extent of where there is land available to develop.”

For San Diego, which is severely supply constrained, new construction doesn’t simply mean the availability of product but rather the availability of new, quality product. Quality supply is driving users to the market. “Demand has been steady, but supply is so constrained in the market,” says Irwin. “When functional new buildings are delivered in the market, we see users gravitate toward those new buildings. Absorption follows that.”