Brian Starck

Two industries are leading San Diego's office market: life science and defense. Since 2017, the two industries have accounted for 3 million square feet of leasing activity, according to research from Cushman & Wakefield. Life science is the overall leader. San Diego's office market has an 11% vacancy rate. For life science, however, the vacancy rate falls to only 6.25%. With increased funding from congress and venture capital interest, these two industries are poised for even more growth in 2019. That will have a big impact on San Diego's office market.

“As of the third quarter 2018, San Diego's office market consisted of close to 78 million square feet of product, sitting at 11.0% direct vacancy. In comparison, San Diego's life science market consists of almost 19 million square feet, sitting at an astounding 6.25% direct vacancy rate,” Brian Starck, executive director

Cushman & Wakefield. “Digging a little deeper into the vacancies for life science product, most of the large block vacancies in San Diego's core central submarkets are old second generation product that are not currently in a condition to attract and retain top talent, pushing the direct vacancy rate even lower for quality space than what is recorded. When analyzing true competition between spaces, the supply of premium space is far less than the demand and therefore resulting in higher rents.”