The majority of the absorption can be attributed to business expansion within San Diego County, along with some new and startup businesses coming in, according to Voit. The industrial market has performed well through the first three quarters of 2000 and should continue to do so into next year, according to the brokerage.
With a third-quarter 2000 vacancy factor of 6.36%, industrial prices for both leases and sale properties should rise 5% to 7% over the next year according to Voit. The current average asking lease rate for industrial product in San Diego County is 60 cents per sf, triple net.
"We are also witnessing vacancy rates beginning to decline, while leasing activity is increasing. Currently, there is over one million sf of new product under construction, with another 1.55 million sf on the slate or being planned," the report states.
The research and development market also continues to grow. Even with all the new development, the vacancy rate remains below the 10% mark. Most speculative developments are still currently on the drawing board; some construction has been held up until more pre-leasing occurs, according to Voit.
These efforts will ensure the strength of the market by not overbuilding. The current average asking lease rate for R&D product in San Diego County is 96 cents per sf, triple net. Currently, there is more than a half million sf of new product under construction, with another 2.6 million sf on the drawing board.
Most economic forecasters remain optimistic that the expansion will continue into next year. The San Diego County economy added an estimated 36,000 jobs in 1999 and another 30,000 this year. Even with the expectation of a healthy economic slowdown and new construction waning, demand still remains strong, according to Voit.
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