Capital investors continue to be confident in the San Diego office market
Since the start of 2018, there have been 10 sales over $100 million, signifying investors’ confidence in the office market
July 17, 2019
- Since the start of 2018, there have been 10 sales over $100 million, signifying investors’ confidence in the office market. The Class A segment has a total of 580,521 square feet (s.f.) positive absorption, year-to-date 2019, and over 1.7 million s.f. of occupancy gains since 2017. Recent and continued positive demand for quality office assets has resulted in aggressive institutional capital, with three out of the last four years seeing high watermark prices per s.f. metric.
- The most recent example is the sale of the La Jolla Commons in Q2, which sold for $525M, or $712 price per s.f. On the heels of this transaction, the market’s overall average sale price per s.f. rose to its all-time high of $392, up 9.5 percent from the prior year.
- Although 2019 started off slow, office sales activity is picking up again while investor outlook remains upbeat dueto positive market fundamentals. Office vacancy is stabilized at a 10-year low, asking rents are at an all-time high, 800,000 s.f. of future occupancy is slated, and speculative ground up development is still very minimal.
Source: JLL Research, RCA