A new report from Colliers shows that San Diego’s office market is seeing continued recovery.
During the third quarter of 2021, the region saw a 269,000 square foot negative absorption, which marks the second consecutive quarter of growth.
Leasing demand reached levels that haven’t been seen since 2018 and 2019, indicating that the office market is seeing a healthy upswing.
Thanks to this activity, companies such as Kilroy Realty and America Assets Trust have started developing new Class A projects. In fact, Kilroy purchased a 1.3-acre site for $42 million in Downtown San Diego, where it will build a 275,000 square foot office tower.
By the end of this year, Collier is anticipating that Class A offices will see net positive demand despite experiencing negative absorption during the first quarter.
Along with leasing activity, office vacancies also fell 32 basis points during the third quarter to 13.5%. Asking rents also slightly grew to $2.98 per square foot for the county, and $3.53 for Class A rents.