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SAN DIEGO—When the question of an imminent office correction in San Diego arises, it depends on whom you ask. Cushman & Wakfield's senior managing director Frank Wright, whose focus is the Downtown San Diego office market, tells GlobeSt.com the region should beware, while C&W broker Brett Ward, who focuses on the suburban San Diego office market, says there is enough user interest to absorb any corporate blips that could cause a rise in vacancy.

Smaller office users are increasing in this market, and Wright tells us San Diego has always been a "branch-office market," with the average user being in the 2,500-square-foot to 3,500-square-foot range, depending on submarket. "Also, we are seeing startups that are now able to leave their homes and/or executive-suite offices and go out on their own."

In addition to branch offices, Wright says he is also seeing software firms, cybersecurity firms, small law firms breaking from large law firms and mortgage companies taking space as small users in the San Diego market. "Basically, all major submarkets have seen this type of activity, from Downtown to Carlsbad on the west and from the east side of Mission Valley to Rancho Bernardo in the east San Diego markets."

The fact that small users are gaining ground in the real estate market sounds like a positive sign for the region. But Wright cautions that we shouldn't get too comfortable. "It has been very active the past couple of years, but is leveling off. Be careful; a correction could be coming due to larger firms downsizing. Small user activity will continue but will have trouble making up the difference in square footage of leases signed versus vacated. In addition in many cases, tenants upon renewal (whether renewing or relocating) are needing less office space since the trend is a smaller footprint and less space per employee and suggesting employees work from home."

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Meanwhile, Ward tells us he sees the increase of small users in the market as more of a growth. "A lot of that tenant demand is centered around Del Mar Heights. A lot of people who are housed or officed in coastal markets from Encinitas down to Old Del Mar can't find space in Encinitas or in the north beach cities, so they are going to Del Mar Heights."

Ward adds that while from a macro standpoint, office downsizing in the Downtown market may be accurate, the concern over Qualcomm in particular downsizing both globally and locally won't have a negative impact on the San Diego market, he says. "Qualcomm is looking to cut 4,500 jobs globally and 1,300 locally, but people assume it's as high as 2,500 here, and it's not. The firm is downsizing internationally, and some of the people who did leave are highly talented engineers who jumped ship early. Big companies in the market are coming from San Francisco to recruit talent right now. Lifestyle is important to tech employees, and Millennials are getting older as well and could be content with living in the suburbs. But those companies are going to have more of a reason to grow down here because of opportunity with some of those layoffs. There are big tenants in the market trying to feed off the talent pool we have here."

L-3 Linkabit has spawned 200 or more companies featuring talented engineers doing their own thing, Ward adds. "It had really been slow throughout the summer, but overall, tenants are moving into the San Diego market: Fitbit, GoPro and some large tech companies are looking at the market right now, which is all good—we want that migration from the Bay Area."

Ward says he is seeing professional and financial-services firms and small attorneys take much of this smaller space, and he is seeing a growth of creative, collaborative office space being made available to smaller users in properties like the MAKE redevelopment in Carlsbad, which is offering tenants space as small as 1,000 square feet.