San Diego Sees Higher Office Vacancy, Softer Rents

SAN DIEGO, CA— An increase in office vacancy in San Diego County to 12.7% during the first six months of the year was accompanied by the region’s first decline in direct asking rental rates in more than five years, a Cushman & Wakefield report on the second quarter shows.

“It’s certainly challenging right now,” says Eric A. Northbrook, executive directorfor Cushman & Wakefield. “It’s challenging for owners, and from a landlord’s perspective, there’s obviously more supply than there is demand.”

The 2Q office report, which covers the six months ending June 30, shows the countywide office vacancy rate up nearly one percentage point from 11.8% at year-end 2007, and a coinciding decline in asking rates, which stand at $2.69 per sf per month compared with $2.73 per sf per month six months ago, whil asking Class A office rental rates of $3.09 per sf per month are down from $3.18 per square foot over the same period.