SAN DIEGO-Four industries have been identified as growth markets creating demand for the commercial real estate market here by NAIOP San Diego, a chapter of NAIOP, the Commercial Real Estate Development Association. Derived from four major economies or “dynamic clusters” in San Diego—the military; convention, tourism and gaming; research, technology, innovation and manufacturing; and the county’s local economy, the four specific areas targeted for growth by the organization were unmanned military aerial vehicles, sustainable technology, wireless mobile medical devices and craft-beer breweries.
Yesterday, GlobeSt.com and 300 commercial real estate professionals attended a breakfast conference at the Marriott San Diego Del Mar entitled “San Diego’s Emerging Growth Industries: Drafts to Drones,” presented by NAIOP San Diego. The conference featured moderator Mark Cafferty, CEO, San Diego Regional EDC, leading panelists representing the four growth segments to discuss what’s in store for San Diego’s emerging growth industries and what it means for the commercial real estate industry that provides the space where San Diegans work. Panelists included Jim Zortman, senior VP, Northrup Grumman Aerospace Systems; Jim Waring, president and CEO, CleanTech San Diego; Tomme Arthur, president, Port Brewing; and Tom Watlington, CEO of Sotera Wireless.
With SPAWAR and military IT/cyber-technology based in San Diego, the region is poised for growth in one of the military’s key areas: the development of unmanned aerial vehicles. However, there are some challenges in finding local engineers to fill those jobs, said Zortman. “We have some work to do if we’re going to become competitive in this industry,” said Zortman. Cafferty suggested encouraging local colleges and universities to promote engineering degrees for the development of military UAV and other technology.
On the sustainability front, Mayor Jerry Sanders has advocated for clean technology and has promoted San Diego as a “clean-tech hub” devoted to sustainable practices in business, said Waring. Attracting companies that can offer “greener” pumps and building systems and even retrofit buildings for cleaner operations is what’s needed. “There’s an increasing trend for a more sustainable economic system, but it must be led by businesses that embrace the new technology,” said Waring. PACE programs that drive renewable energy, energy efficiency and even water conservation for businesses can help building owners reduce their property taxes. “The yields are outstanding, and this should create a lot of jobs,” Waring added.
The region is also poised for growth in wireless medical-device technology—in particular, wearable monitors that track patients’ vital signs. “These allow doctors to monitor patients on a continuing basis and detect early signs of deterioration,” says Watlington. With 47 research institutes and a smart, educated population, San Diego is one of the top three clusters in medical innovation in the country—and is becoming a hub for wireless-mobile medical-device technology throughout the world—making now the time to cater to this sector’s current and future real estate needs, he added. “The medical-device industry pays good wages, and I’d like to think we are good tenants.” In many cases, the tenants will be start-ups like Soltera, which has 65 employees.
Finally, the tourism and local economy cluster has encouraged the development of craft breweries here. Over the last 15 to 20 years, this industry of small but growing players is still on the upswing, said Arthur, who started his business in 2006 and is now looking to build a building for his thriving brewery when his current lease is up. “San Diego is the Napa Valley of beer,” said Arthur. “There are 12 to 15 craft breweries opening their doors this year alone.” It behooves the commercial real estate industry to cater to these start-ups, which will likely increase their space needs as they, like Port Brewing, struggle to deal with federal and state regulatory, licensing and compliance issues that go with beer manufacturing.
In accommodating these four growth industries, understanding matters such as Baja labor operations, immigration laws, solar technology and the flight from corporate jobs to craft industries will become key for those serving their local commercial real estate needs.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
