The Latest in San Diego Commercial Real Estate

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Investors and tenants across sectors are turning to San Diego, California, as a commercial real estate market ripe with opportunities. 

The Southern California city is among the top ten biggest in the country, home to sizable employers and small businesses alike. Crexi offers investors, tenants, and other property seekers a window into San Diego’s bustling commercial real estate market, giving them the tools needed to identify and acquire the best assets.

Crexi also aids brokers and those representing San Diego listings with a powerful marketing vehicle, including tools to maximize assets’ exposure and close more deals. To date, brokers have used Crexi to close more than $300 billion in commercial property deals and to market over $1.2 trillion in listings.

Crexi proudly supports San Diego, Escondido, Carlsbad, El Cajon, Chula Vista, and the surrounding communities as the region’s fastest-growing digital CRE platform.

The State of San Diego Commercial Real Estate 

San Diego is located midway between Mexico and Los Angeles, and is the second-most populous city in California. The San Diego-Tijuana transborder region is home to over 5 million residents and is the second-largest transborder corridor, just behind the Detroit-Windsor, Canada corridor.

The San Diego metropolitan area’s diverse economy is powered by the manufacturing, international trade, tourism, research, and military and defense industries. Due to its near-perfect location, companies interested in global markets in Latin America and the Pacific Rim find San Diego the ideal place to do business.

Although retail and office properties continue to struggle, the biotech industry in San Diego has pushed up industrial rents. The multifamily sector continues to boom as renters relocate from high-cost urban areas in Central and Northern California.

San Diego Regional Breakdown

The most recent census data shows that the population of San Diego has grown by more than 9% in the last decade. The metropolitan area is home to a diverse, multicultural population and the country’s largest military community. By 2050, San Diego County is forecasted to add more than 600,000 new residents:

  • San Diego is home to over 1.4 million residents, with nearly 3.4 million people living in the San Diego-Carlsbad metropolitan area.
  • The population of San Diego County has grown by 0.17% year-over-year.
  • San Diego’s population growth is driven by its innovative economy and diverse, multicultural community.
  • The city is the second most populous in California (after Los Angeles) and the 8th most populous in the US.
  • Located adjacent to the Mexican border, San Diego County spans over 370 square miles.
  • The median age in San Diego is 36.4 years, with 56% of the population between 20 and 59.

Employment in San Diego has grown by over 130,000 jobs since the beginning of the year, with leisure, hospitality, and food service sectors showing the most increase in employment. The job market in San Diego is driven by national defense contractors, the tech and innovation industries, tourism, and education and health care.

  • The GDP of the San Diego-Carlsbad MSA is over $253 billion, and has grown by over 52% over the past decade.
  • Employment growth in San Diego County was -0.30% last year, while median household incomes increased nearly 3.8% year-over-year.
  • The unemployment rate in metro San Diego is 6.7% (as of April 2021).
  • Target industry sectors in San Diego include life sciences, genomics, biotechnology, telecommunications, software and electronics, defense, and tourism.
  • San Diego receives top ratings for life science and bioscience locations, innovation, and concentration of military/defense assets.
  • The largest employers in the San Diego region include the United States Navy, University of California, Sharp HealthCare, County of San Diego, Scripps, and Qualcomm.
  • The University of California, San Diego (UCSD), San Diego State University, San Diego Community College District, and University of San Diego (USD) are among the top universities and colleges in San Diego.
  • Over 88% of San Diego residents are high school graduates, while nearly 40% hold a bachelor’s or an advanced degree.

Transportation infrastructure in San Diego includes four major interstate highways, six state highways, mass transit and passenger rail service, daily freight rail services, and 80 trucking companies. San Diego Harbor is a dynamic shipping hub, housing three major terminals serving cruise ship and cargo operations. San Diego International Airport serves over 36,000 passengers daily and handles over 70,000 tons of air cargo each year.

San Diego Industrial Market

The industrial market in San Diego is breaking records. Industrial leasing activity in the San Diego metropolitan area exceeded 4.6 million square feet, the highest since Q3 2015. Vacancy is the lowest since 1998, while net absorption of industrial space in San Diego is the highest since Q3 2018. Over two-thirds of the industrial product under construction is currently pre-leased:

  • Total industrial inventory: 196,034,628 SF
  • Average asking rent: $1.03 – $1.41 per SF per month, NNN
  • Vacancy rate: 4.0%
  • Absorption: 1,473,915 SF Q1 2021
  • New construction: 445,260 SF delivered (Q1 2021) with 6,518,307 SF under construction
  • Largest industrial submarkets: Central San Diego, North County, South San Diego, East County

Discover San Diego industrial space for rent.

San Diego Office Market

Positive signs are emerging for the San Diego office market with net absorption and asking office lease rates in the San Diego metro area remaining steady. With over $2.2 billion of venture capital raised by life sciences and tech companies, construction activity remains high as developers strive to meet anticipated demand:

  • Total office inventory: 78,839,695 SF
  • Average asking rents: $3.18 per SF per month, full-service gross
  • Overall vacancy rate: 14.2%
  • Absorption: -768 SF (Q1 2021)
  • New construction: 66,000 SF delivered to market (Q1 2021) with 1,553,688 SF of office space under construction
  • Largest office submarkets: Central San Diego, Downtown San Diego, North County, SW Riverside

Discover San Diego office space for lease. 

San Diego Retail Market

Retail leasing activity in San Diego is stabilizing, as fitness centers, health, and social service providers help asking rents for retail space remain unchanged. Although negative net absorption is about 111,000 square feet, new leasing activity surpassed 528,000 square feet in the first quarter of this year:

  • Total retail inventory: 69,945,112 SF
  • Average asking rent: $2.48 per SF per month, NNN
  • Overall vacancy rate: 6.3%
  • Net absorption: -110,797 SF (Q1 2021)
  • New construction: 26,600 SF delivered (Q1 2021) with 27,200 SF under construction
  • Largest retail submarkets: North County, Central San Diego, East County, South San Diego

Discover San Diego retail property for lease.

San Diego Multifamily Market

Although vacancy increased slightly year-over-year, investors like what they see in overall in Southern California, with cap rates for multifamily transactions in San Diego averaging just 3.9% year-to-date. Apartment rents are holding steady, and the employment outlook is strengthening as Apple announces plans for a significant expansion in the metropolitan area:

  • Total housing units: 1,233,923
  • Renter occupied: 46%
  • Average asking rent: $1,859 per month
  • Vacancy rate: 4.1%
  • Average cap rate: 3.9%
  • Median sales price per unit: $256,500
  • New construction: 0 units delivered in Q1 2021 with 5,087 units currently under construction
  • New multifamily developments: 20 projects currently under construction with Mission Valley a popular spot for new development
  • Median household income: $83,985
  • Per capita income: $40,389

Discover San Diego multifamily property for sale.

How Crexi Connects Buyers and Tenants to San Diego Commercial Real Estate

Those seeking commercial property in San Diego, from retail for lease to multifamily buildings for sale, can use Crexi to reachtheir investment goals quickly.

Investors and tenants can navigate available San Diego commercial property with a few clicks, narrowing searches by dozens of variables including price or rate per square foot, square footage, property type or subtype, vacancy, and neighborhood.

Upon finding a property of interest, buyers and tenants can easily click on the page to connect with the listing’s broker and gain more information. San Diego property seekers can also download brochures and PDFs and even submit their letter of intent, all through Crexi.

Intelligence Equips Investors with Data and Market Knowledge 

Due diligence, research, and data analysis are essential steps in the commercial real estate process. Crexi arms investors with easy ways to understand San Diego as an investment market and determine the best properties for their needs. Enter: Intelligence.

Intelligence is a subscription-based tool that empowers San Diego buyers and tenants to search through millions of property records and sales comparables, bolstered by more than 50 detailed MSA market reports. The Insights tab, included on every listing page, surfaces a real-time look into current market data and demographics, such as average asking price, square footage, and other relevant information.

Intelligence is available to buyers, sellers, and tenants on a subscription basis.

How San Diego Brokers Thrive with Crexi

San Diego commercial agents use Crexi to manage more than 400 properties for sale and over 1100 properties for lease within the city limits. San Diego brokers showcase their assets using Crexi’s robust yet simple marketing tools, togain real-time insights into every lead for immediate engagement.

Brokers can list their San Diego properties across several property types and subtypes, including:

  • Industrial buildings
  • Multifamily developments
  • Retail properties
  • Offices units
  • Hospitality assets
  • Mixed-Use listings
  • Land 
  • Non-traditional properties such as self-storage, data centers, etc.

Crexi’s broker tools allow agents to navigate their listings from start to finish. San Diego brokers can manage each step of the due diligence process using Crexi, thanks to the platform’s secure file management and storage solutions.

And while Crexi’s free broker tools are powerful, Crexi’s real advantages emerge with Sale PRO, Lease PRO, and All PRO

Crexi PRO Dashboard 2020

Crexi’s All PRO Membership

Crexi PRO enhances San Diego brokers’ workflows with advanced digital tools designed to accelerate their pipeline and earn more deals. PRO brokers on Crexi enjoy next-level access to lead information and reporting capabilities, letting them prioritize building their network and lead connections.

PRO listings also receive coveted placement at the top of Crexi’s search pages, visible to actively seeking buyers and tenants. These listings are distributed to Crexi’s entire email database, tailored to user preferences by machine learning, ultimately earning a 10-15% higher click-through rate than the average.

PRO users enjoy access to Intelligence at no additional cost, allowing them to improve their market knowledge and be of greater service to clients.

San Diego brokers use Crexi PRO to engage with the more than 93,000 property seekers looking in the region in the last two years, as well as the over 6.5 million leads nationwide who used Crexi in their search.

On average, Crexi PRO users receive up to 125% more leads and close up to eight more contracts than non-PRO brokers.

Contact to learn more about All PRO.

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Shanti Ryle
Shanti Ryle

Content Marketing Manager

Shanti leads Crexi's content marketing strategies with 7+ years of content development experience, creating everything from blog posts to award-winning podcasts. Previously, she worked on content teams at Snapchat, Weedmaps, and HopSkipDrive as well as developed copy, articles, and media for freelance publications.

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