San Diego average starting rents for creative office have now outpaced Class A rents
- Over the last five years, developers are retrofitting buildings as a way to stay competitive and appeal to the more modern tenant. The common trend is happening with older-generation industrial and office buildings that are converted into creative offices. The demand for creative office by end of 2018 is projected to have a total of 824,290 square feet of positive net absorption since 2015, averaging 206,072 square feet each year. To put that into perspective, that is about 5.8 percent of the creative inventory which is significantly higher than traditional office at 1.3 percent of the inventory since 2015. Creative office average rents have increased by 45.8 percent since 2012.
- Few of the larger creative office properties that been recently redeveloped include: The Ampersand in Mission Valley for a total of 340,000 square feet, The Oberlin for 63,000 square feet, and the Enclave Sorrento for a total of 220,000 square feet. Several of these creative office concepts incorporate new entrances, collaborative outside setting, inside gathering places, efficient floorplates, interconnecting bridges, in which each office campus offers its own unique atmosphere. Few of the larger creative office space leases in 2018 include Sony for 120,000 square feet, Encore Capital for 96,000 square feet, Samsung for another 46,000 square feet.
Source: JLL Research