Cuthbert: The interesting thing we've seen is that tenants' options in the market are so limited that we're renewing on short-term deals. In the past, there was a lot of downsizing, but now the opposite of that is taking place. Tenants are looking to expand, but there's nothing out there, so they're staying put, and new companies aren't taking the old space. It's turned from a tenants' market to a landlords' market, and there's pretty much no vacancy.

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GlobeSt.com: What types of jobs is the industrial sector creating in this market?

Tchang: It's a pretty diversified mix. In Carlsbad, we see the life sciences and active-sports industries as the two biggest drivers we've had. In Poway, it tends to be a little more of the distribution users.

Cuthbert: It's more mom-and-pop in Poway. In Carlsbad, in addition to what Ted said, there's also some creative. Poway, because it's more of a suburban market that's off the freeway, the tenants who are locating and the buyers who are buying in that market are there strictly for convenience. In Poway, there's no street parking, which is a huge thing. In Miramar, there are trucks parked on side streets, but in Poway you have to house everything on your site, so it has the cleanest business parks. Poway is driven more by owner/users than Carlsbad.

GlobeSt.com: Ted (Tchang), what is appealing to Techbilt Cos. about these two office markets?

Tchang: Our company has had a long history in both of those cities. We've been in Carlsbad since the mid-1970s. The land we bought there was originally 600 acres, and it was developed in three phases, so we've been through a lot of cycles. The North County areas are strong—currently, Carlsbad Oaks North is the largest of the three phases of industrial development that we did. We've seen improvement in the business-friendly attitudes of the city. The City of Carlsbad used to be more difficult to work with, but over the last 10 years, there's been quite a significant transformation. Sometimes users from other places have concerns that Carlsbad is not business friendly, but the elected officials and staff meet with them and have been very accommodating in helping businesses meet their needs. Poway, too, is great to work with—we have been in Poway since the 1980s, and it has a good attitude toward fostering business.

Cuthbert: The Carlsbad city manager reached out to Ted for the first time in Ted's career. Poway is in tune with businesses and business owners. They met with Ted and me and loosened the rules about how businesses can operate in the back of a building. Carlsbad and Poway have two of the most business-friendly environments in San Diego.

GlobeSt.com: What else should our readers know about San Diego office construction?

Cuthbert: It will be a little ways out before we see spec office construction.

Tchang: We're not looking to build any spec office in the near future. Carlsbad and Poway are submarkets of larger areas, and they haven't been hotbeds of office development. Other things contributing to that include the rise of telecommuting contributing to companies being able to run their operations with fewer square feet per employee.

Cuthbert: It's a pretty unique market for us now as far as build-to-suits and land. It was nonexistent, and now we're seeing building sales. Users are trying to buy buildings for themselves. It's a really interesting market because it seems there's a lot of money chasing few deals.