Last quarter, tech investment his another record high in San Diego. According to research from CBRE, tech investment in the market totaled $259.5 million with two thirds of the capital allocated to software and web companies and the remaining third to hardware services. Life science, oddly, only accounted for $76.2 million of the total tech investment—unusually low activity for the industry.

“In just the first quarter of 2019, we have already met two-thirds of the total tech investment from 2018,” Andrew Ewald, first VP at CBRE, tells GlobeSt.com. “With that under our belt, we will likely pass aggregate venture capital and private equity investments. The real question is: will we see another massive unicorn investment in the tech field, or many smaller ones?”

Diversity and a strong labor pool are attracting the strong capital demand, and robotics and autonomous driving innovators are leading the pack in fundraising. “San Diego has grabbed some headline companies, which drives awareness back to the city,” says Ewald. “The publicity from investors contributing to the SD tech infrastructure draws attention of other investors. We are also starting to see companies receive capital in later stages, for example TuSimple Series D, and Seismic Series The benefits of later series capital funding: these companies have been around to grow, have an established business plan, and have shown to be profitable enough to secure these large rounds.”

The tech investment has had a significant impact on commercial real estate. Leasing activity and rental rate growth, particularly in the UTC and Central Markets, are up. In addition, landlords are focusing on attracting these growing companies with capital improvements. “As companies look to attract unicorns or other high growth companies, landlords are investing in amenity rich environments, and businesses are willing to pay higher pricing to leverage the quality amenity rich assets ultimately to help their business grow, help to recruit and retain the right talent, and box out competitors,” says Ewald.

In addition to the tech investment activity, two new unicorn companies emerged in San Diego. These companies—now valued at more than $1 billion—add to San Diego's tech appeal, and could help to fuel more tech investment. “Companies that reach that status put San Diego on the map in a different way,” says Ewald. “It is proof of the concept that San Diego companies can grow into billion dollar organizations. It shows that the San Diego region can support and sustain this variety of companies and their growth.”

Ewald expects strong tech investment throughout 2019. “There is lots of momentum,” he says. “There are still many companies that have received Series A/B/C, which indicates they may be poised for more growth. PetDesk, AttackIQ, Measurbl.”