Tenant activity in the office, industrial and R&D sectors achieved new all-time highs with a combined total of 11.2 million sf of net absorption during the year, Karras says. The previous high was 8.2 million sf in 1989.
As a result, countywide vacancy rates have plummeted and now stand in the single-digit range for all three product types.
"As we enter 2001, there are no immediate signs of slowing," Karras says. "Demand for space continues to exceed the available supply and the previously speculated overbuilding scenario never materialized.
"The recent instability experienced by the dot-coms and some high technology firms is causing many of these companies to scale back or postpone expansion plans. This may have some impact on demand as the year progresses.
Fortunately, Karras says, San Diego does not have an overabundance of the dot-coms like Silicon Valley or San Francisco, so any local impact should be less severe. However, demand in most other business sectors is expected to remain strong and we expect 2001 to be a year of continued growth and stability.
The San Diego County office market continued to set new construction records in 2000, with 3.3 million sf of completed and another four million sf under way. Demand for new space kept pace, with 4.6 million sf of net absorption for the year, according to Karras.
Not only is this a dramatic 128.7% increase over the two million sf absorbed during all of 1999, it surpasses the market's previous all-time record set in 1998, when 3.3 million sf was absorbed.
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