During this week of giving thanks, we would like to take time to share our gratitude to live in such a vibrant city, surrounded with many wonderful people who have helped pull our economy up by its bootstraps; who continue to drive invention and discovery in many industry sectors; and who provide and maintain so many wonderful places to work, live and play. Your efforts help to paint an ever-rosier picture for San Diego’s future.
What’s behind San Diego’s growth?
- San Diego is increasingly popular with nationwide and foreign commercial real estate investors
- San Diego’s office vacancy rate is the lowest since 2007
- Local employment continues to grow
- Demand is fueling new apartment construction
Property acquisitions are being fueled in part by interest rates that remain at historic lows, with well-qualified borrowers frequently able to get purchase financing at rates around 4 percent, with funders willing to finance 85 percent or more of property deal values. The pool of buyers and capital sources is rising, with pension funds and other institutional players looking to put their money into properties and investors from outside the U.S., especially from China and Canada, are increasingly shopping the local and national markets. Among the results is that San Diego County is on track to see around $2 billion in office property sales transactions for 2014, which would be a 20 percent improvement from 2013. Already, 2014 is running about 15 percent ahead of the same point of 2013, and there is more room for growth ahead in the coming year or two. The local region registered annual office property sales totals of around $4 billion during the pre-recession peak of 2006-07.
Managing Director, JLL San Diego
Despite gains for the region’s office and industrial markets, its apartment market remains the hottest commercial segment for new development and property acquisitions.
The big property deals generally speak to the lack of available supply in some of the higher demand market. The local region saw eight apartment properties with more than 100 units change hands in the first three quarters of 2013. In the same stretch of 2014, there were 12 of those deals, and more could take place before the year is out.
Darcy Miramontes, J.D.
Executive Vice President, JLL San Diego