According to the BRE Commercial research, North County's office sector has experienced four consecutive quarters of positive net absorption. It wound down 2002 with 77,768 sf absorbed in the fourth quarter and 556,973 sf absorbed for the entire year.
Meanwhile, office vacancy rates here are steadily decreasing. Vacancy is hovering at around 15% and not expected to be affected by the 500,000 sf of new office product currently under construction, as most of that space has already been pre-leased.
In Carlsbad, 99,650 sf of net absorption was absorbed during the fourth quarter of 2002, which reflects a significant increase from the 34,439 sf of positive net absorption experienced in the third quarter. The region, which has a current occupancy rate of around 18%, reported a total of 434,796 sf of positive net absorption for all of 2002.
However, not all of North County had a favorable fourth quarter, as both the Del Mar and Rancho Bernardo submarkets experienced negative net absorption. Del Mar reported 7,903 sf of negative net absorption, while Rancho Bernardo experienced 88,949 sf of negative net absorption in its class B product alone.
Despite those poorly performing sectors, BRE Commercial's report says that "investor and developer confidence in the strength and resiliency of the North San Diego County office market is strong," adding that "investors and real estate analysts have kept a close eye on what occurs here."
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