Real Estate Insiders Discuss Booming Market at NAIOP Event

LA JOLLA, CA-A panel of local real estate vets held center stage at a recent event hosted by the San Diego chapter of NAIOP. Held at the La Jolla Marriott, the panel looked into their crystal balls and gave their predictions on upcoming market trends as well as reviewing its current conditions for the mid-county area.Mark Read, senior managing director of CB Richard Ellis, moderated the panel. Panelists included David Marino, principal and executive vice president at the Irving Hughes Group; Eric Northbrook, senior director of Cushman & Wakefield; Rick Sparks, executive vice president of CB Richard Ellis; and Mark Wayne, senior vice president and principal of Burnham Real Estate Services. The first topic on the table was the recovering office market. While the mid-county office market hovers around 17% vacant for class A space, that number is improving, according to Northbrook.”We have seen a 3% to 4% rent rise over the last two to three years,” Northbrook said. He added that the stronger submarkets “have seen a slight increase in lease rates, but that the demand and supply have kept up pace.”Wayne agreed that the office market is strengthening, particularly the Kearny Mesa and Mission Valley submarkets. “But there is tremendous activity and lots of existing tenant expansion,” Wayne said.Marino was not as bullish on the office sector as the other panelists, as he opined that the market remains in a transition phase. “We are right in between a tenant and a landlord’s market,” Marino said. He added that “if we have a drizzling of new capital into San Diego, office space will continue to fill.” As for industrial product, Sparks said there’s a continued push by smaller companies with tighter space needs. He said that industrial condos, in particular, have been selling quickly, with a particular project in Eastlake resembling a residential project more than a commercial one, by requiring a waiting list. “I don’t ever remember a time when we had a waiting list for commercial properties,” Sparks said.