Cautious Developers Serve SD Office Well

Hulse: “At the end of 2006, just 12 months before the start of the Great Recession, San Diego had 3.4 million square feet of office space under construction. In the current cycle, that number has not risen above 1.8 million square feet in a single year.”

SAN DIEGO—Developers restraining themselves from being too aggressive and not overbuilding office properties in the current economy will contribute to San Diego’s staying power when the current cycle reaches its end, Cushman & Wakefield managing director Derek Hulse tells GlobeSt.com. According to the firm, San Diego is one of the top-10 cities for office absorption year-to-date nationally. C&W’s Revathi Greenwood, head of research, Americas, said in a recent national office-absorption report that Santa Clara, CA; Brooklyn, NY; Seattle; Raleigh/Durham; and San Diego are five tech-centered markets that “each have seen more than 1 million square feet in space absorption.”

We spoke with Hulse and Jolanta Campion, director of research for the firm’s San Diego region, about what is causing absorption to be so strong in this market, what will give it staying power when the current cycle ends and what type of space is more—and less—appealing to tenants.