The San Diego Commercial Real Estate Market

Shanti Ryle

September 5, 2025

Key Takeaways

San Diego’s commercial real estate market remains one of California’s strongest, supported by a diverse economy spanning life sciences, defense, tourism, and technology.
The industrial sector is steady, with moderate vacancies and strong demand in logistics and manufacturing hubs like Otay Mesa and North County.
Office demand is shifting toward smaller, higher-quality spaces as tenants adapt to hybrid work models and focus on Central County submarkets.
Retail performance is stable, with value-oriented and experiential tenants driving leasing while limited new construction supports long-term stability.
Multifamily fundamentals remain solid, though rising supply and affordability challenges are tempering rent growth and prompting more concessions.

With its coastal setting, thriving business community, and fast-growing population, San Diego is one of California’s most dynamic commercial real estate markets. From life sciences and medical office space to multifamily developments and retail corridors, the city offers opportunities across every asset type. Its strong economy, supported by a broad range of industries, makes San Diego a reliable market for both investors and tenants.

Crexi gives brokers, investors, and tenants the tools they need to connect with San Diego’s active market. From marketing listings to analyzing data, Crexi helps streamline the entire transaction process, saving time and maximizing exposure. Brokers across the country have already leveraged Crexi to close more than $615 billion in CRE deals and market over $7 trillion in property value.

Today, the Crexi platform continues to support communities across San Diego County - including Chula Vista, Carlsbad, Escondido, and beyond.

Downtown San Diego with overhead views of towers and hotels

The State of San Diego Commercial Real Estate

Bordered by the Pacific Ocean to the west and Mexico to the south, San Diego is more than just a scenic beach community - it’s a powerhouse of cultural, economic, and commercial activity. Its diverse population and international location make it an attractive gateway for trade and investment, while its mild climate and world-famous lifestyle continue to draw residents, tourists, and talent from around the globe.

San Diego’s economy thrives on a balanced mix of industries. Life sciences and biotech companies anchor a strong innovation ecosystem, while military and defense spending provide economic stability. Tourism and hospitality add another layer of opportunity, fueling demand for retail, office, and multifamily properties throughout the metro.

The city has also earned a reputation for forward-looking development. Local leaders emphasize sustainable design, urban infill, and mixed-use growth, ensuring that expansion aligns with San Diego’s unique character and environmental priorities. This focus on smart growth positions the market as both a vibrant place to live and a promising destination for investment.

San Diego Regional Breakdown

San Diego’s metro area has grown steadily over the past decade, outpacing statewide population trends and reinforcing its appeal as both a business hub and a lifestyle destination. The region continues to draw residents and employers with its mix of innovation, culture, and coastal quality of life.

At the same time, the city has launched strategic initiatives focused on housing affordability, sustainable development, mobility, and community prosperity - aiming to balance growth with livability. These efforts highlight San Diego’s commitment to building connected neighborhoods, improving infrastructure, and fostering long-term economic opportunity. Together, they paint the picture of a market built not just for expansion, but for resilience and quality of life.

San Diego is home to 1.38 million people in the city and nearly 3.3 million people in the San Diego County metropolitan area.
Since 2010, the city population has increased by 5.7% and the county has grown by 5.9%, versus a state-wide population growth of 4.8%.
The largest cities in the metro area include San Diego, Chula Vista, Oceanside, Escondido, and Carlsbad.
Median age is 36, a little less than the overall figure in the state (38.2 years).
Per capita income is $48,258, about 20% higher than the US.
The median household income is $105,780, about 10% higher than the figure for California overall.
Nearly 50% of the households have a median income of more than $100,000 annually.

San Diego Job Market

San Diego’s economy is both resilient and diverse, supported by industries ranging from defense and aerospace to life sciences, healthcare, and tourism. The region has built a reputation as one of the most inventive markets in the world, blending research, innovation, and global connectivity to fuel a thriving economy.

With a highly educated workforce and strong ties to major universities, the city continues to attract employers seeking top talent. Strategic investments in infrastructure, sustainability, and cross-border trade also reinforce San Diego’s position as a global hub. Together, these factors create a job market that is competitive, forward-looking, and well-positioned for long-term growth.

The total real domestic product (GDP) for the San Diego-Carlsbad MSA is $261.6 billion, increasing by more than 22% over the past ten years, based on St. Louis Federal Reserve (FRED) data.
The unemployment rate is 4.9% (August 2025), with education and health services, government, and other services reporting the strongest job gains.
The 32nd St Naval Station, Collins Aerospace, General Dynamics Nassco, Illumina Inc., Kaiser Permanente Vandever Med, and Merchants Building Maintenance are among the major employers in San Diego County.
San Diego has been ranked #1 in concentration of world military/defense assets, #2 as the most inventive city in the world, and #4 for top life science and biosciences locations, according to SanDiego.gov.
The city was also named as one of the “World Smart Cities” by National Geographic - the only North American city included on the list.
The three largest universities in the area are San Diego State University (SDSU), the University of California, San Diego (UCSD), and the University of San Diego, each contributing significantly to the region's academic prestige, research capabilities, and workforce development.
About 52% of residents hold a bachelor’s degree or advanced degree, which is significantly higher than the US overall figure.
The transportation infrastructure includes the Interstate 5 and Interstate 8 highways, the Port of San Diego, and the San Diego International Airport (SAN).
The city’s close proximity to the Mexican border, as well as convenient access to numerous nonstop flights via the San Diego International Airport, make it an excellent home base for companies operating in the global market.

San Diego with a view of Coronado Island in front of the ocean

San Diego Industrial Market

San Diego’s industrial market remains a cornerstone of the region’s economy, shaped by its role in defense, manufacturing, and cross-border trade. While vacancy has inched upward, demand from sectors like aerospace, logistics, and life sciences continues to provide a steady foundation.

Submarkets such as Central County and North County remain tighter than the metro average, highlighting the importance of location in tenant strategies. New development, much of it concentrated in Otay Mesa, signals long-term confidence in the region’s connectivity and last-mile distribution potential. Even amid shifting conditions, San Diego’s industrial base reflects resilience and adaptability, positioning it as a critical market for users and investors alike.

Market overview (Cushman & Wakefield Q2 2025)

Inventory: 162,663,217 SF
Vacancy rate: 7.7%
Absorption: -1,578,560 SF (YTD)
Deliveries: 532,768 SF
Under construction: 1,991,072 SF
Key leases by tenant: General Dynamics (64,840 SF), Brady Industries (40,320 SF), Extreme Fitness (28,841 SF)
Largest submarkets: Central County, North County

Crexi Insights

These are the most recent industrial lease and sales trends from Crexi Insights (as of August 2025):

For Lease (active)

Asking rate/SqFt (median): $23 per year
Median SqFt/listing: 3,662
Days on market: 168
Total listings on Crexi: 417spaces

For Sale (active)

Median asking price: $3.4 million
Price/SqFt: $381
Median SqFt/listing: 13,800
Days on market: 155
Total listings on Crexi: 58

Sales Comps (past 12 months)

Median sold price: $3.9 million
Sold price/SqFt: $388
Total sales volume: $1.2 billion
Median SqFt sold/transaction: 10,800
Total SqFt sold: 3.3 million
Days on market (median): 289

Find San Diego industrial space for rent.

Downtown San Diego office towers with cars and pedestrians in the foreground

San Diego Office Market

San Diego’s office market continues to adjust to evolving tenant demands and shifting workplace strategies. Hybrid work has reshaped space requirements, with many companies opting for smaller footprints or higher-quality, amenity-rich buildings to draw employees back on-site.

While vacancy has edged higher in several submarkets, demand remains steady in Central County and other core locations where connectivity and modern space drive activity. Smaller professional services and legal tenants are helping to fuel leasing, reflecting a market that’s still active even as larger occupiers reassess long-term needs. Overall, the sector is balancing cautious decision-making with thoughtful investment in top-tier assets.

Market overview (Cushman & Wakefield Q2 2025)

Inventory: 71,387,111 SF
Vacancy rate: 14.5%
Net absorption: -246,787 SF (YTD)
Leasing activity: 1,180,823 SF
Key leases by tenant: Wilson Sonsini Goodrich & Rosati (44,718 SF), Systems Planning & Analysis (35,344 SF), ColRich (23,844 SF)
Largest submarkets: Central County, North County

Crexi Insights

For the latest updates on the office market in San Diego, turn to Crexi Insights. Here is the detailed information on the recent sales and leasing trends as of August 2025.

For Lease (active)

Asking rate/SqFt (median): $27 per year
Median SqFt/listing: 1,697 SF
Days on market: 217
Total listings on Crexi: 1,267 spaces

For Sale (active)

Median asking price: $2.8 million
Price/SqFt: $454
Asking cap rate: 6.6%
Days on market: 201
Total listings on Crexi: 87

Sales Comps (past 12 months)

Median sold price: $1.7 million
Sold price/SqFt: $494
Total sales volume: $489.7 million
Sold cap rate: 9.1%
Median SqFt sold/transaction: 3,698 SF
Days on market (median): 310

Find San Diego office space for rent.

Coronado Bridge connects the island to the main San Diego area

San Diego Retail Market

San Diego’s retail market reflects both the challenges and opportunities of a shifting consumer landscape. While vacancy has inched up, demand remains steady in neighborhood and power centers, driven by value-oriented retailers and experiential tenants expanding footprints.

Leasing activity shows that well-located space continues to attract interest, even as overall absorption trends fluctuate. With limited new construction in the pipeline, most growth is being fueled by re-leasing existing space and upgrading older centers. This dynamic highlights a market balancing cautious consumer spending with retailer confidence in San Diego’s long-term staying power.

Market overview (Cushman & Wakefield Q2 2025)

Inventory: 79,610,265 SF
Vacancy rate: 5.1%
Net absorption: -76,971 SF (YTD)
Under construction: 300,00 SF
Key leases by tenant: Hobby Lobby (64,900 SF), Red White & Blue Thrift (30,000 SF), Five Below (16,500 SF)
Largest submarkets: North County, Central County, South County, East County

Crexi Insights

Retail lease and sales trends from Crexi Insights (as of August 2025):

For Lease (active)

Asking rate/SqFt (median): $27 per year
Median SqFt/listing: 2,180 SF
Days on market: 252
Total listings on Crexi: 630 spaces

For Sale (active)

Median asking price: $3.6 million
Price/SqFt: $585
Asking cap rate: 5%
Days on market: 123
Total listings on Crexi: 87

Sales Comps (past 12 months)

Median sold price: $2 million
Sold price/SqFt: $569
Total sales volume: $389.6 million
Sold cap rate: 5%
Median SqFt sold/transaction: 3,197 SF
Days on market (median): 116

Find San Diego retail space for rent.

The port of San Diego with its downtown skyrisers

San Diego Multifamily Market

San Diego’s multifamily sector continues to show solid demand, even as new supply and affordability pressures shape performance. Recent quarters of healthy absorption have helped keep vacancy levels in check despite ongoing deliveries. Still, elevated development activity and rising costs for renters are holding rent growth below historical norms.

Many owners are turning to concessions to stay competitive, particularly in the luxury segment where vacancies remain higher. The big picture: demand is still there, but the balance between new supply and affordability will shape how the market performs going forward.