San Diego office market report

Q4 2022

For the 11th year in a row lease rates continued to increase in San Diego. At the end of 2022, the asking lease rate for office space were $37.42 a square foot on an annual basis or $3.12 on a monthly basis. This is an increase of 1.2% over 2021. At the end of 2022 there was 3.9 million square feet of new office construction underway. This is down when compared to the end of 2021 when 4.3 million square feet was under construction.
3.9 msf

Inventory

At the end of 2022 there was 3.9 million square feet of new office construction underway. This is down when compared to the end of 2021 when 4.3 million square feet was under construction.
1.4 msf

Net Absorption

There was 646,760 square feet of positive absorption in 2022, nearly matching 2021’s total of 764,238 square feet, giving the San Diego office market over 1.4 million square feet of positive absorption for the last two years.
1.2%

Asking Rent

For the 11th year in a row lease rates continued to increase in San Diego. At the end of 2022, the asking lease rate for office space were $37.42 a square foot on an annual basis or $3.12 on a monthly basis. This is an increase of 1.2% over 2021.
18.3%

Availabilities

The availability rate for the San Diego office market came in at 18.3% for the last quarter of 2022. The amount of available space has remained in the high teens since the beginning of the pandemic.
12.3%

Vacancy

Total vacancy this quarter registered 12.3%, 10.8% was direct and 1.5% was sublet. Sublet space has increased from 600,000 sf at the end of 2021 to 1.4 million square feet at the end of 2022.
-46.0%

Investment Sales

Investment sales volume decreased by 46% when compared to 2021. Total sales volume in 2021 was $2.6 billion dollars and 2022 came in at $1.4 billion, decreasing by 46%. We also witnessed the price per square foot decrease by 8.6%.
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