Rancho Bernardo has seen the most significant office rental rate growth in San Diego County this cycle, according to research from JLL. The report analyzed rental growth for San Diego office product over the last seven years, and found the Rancho Bernardo submarket had a 21.3% increase in rental rates this cycle. In 2017 alone, the market had a 14.2% increase in rents. The second place market was Mission Valley, with 17.4% increase in office rents over the last seven years. The market overall also saw significant rent growth, up 28.8% in the last seven years. To find out more about the office rent growth in San Diego and what is driving the growth in the top markets, we sat down with Tim Olson, managing director at JLL, for an exclusive interview.

GlobeSt.com: Why has Rancho Bernardo seen such significant rental growth over the course of this cycle?

Tim Olson: In San Diego, we are seeing pretty substantial growth from the defense industry and from healthcare. The rental rate increase is mostly due to the ramp up in defense contracting business and healthcare. Additionally, a lot of the growth in the Rancho Bernardo came from growth in the class-B, multi-tenant sector. We saw a lot of growth in projects that are being updated and modernized. Owners are buying and upgrading assets and then are able to push rents pretty substantially. Those are really the two major contributors to the rent growth.