San Diego industrial leasing sees strongest Q2 in three years
Fueled by e-commerce, leasing activity is up 90 percent quarter-over-quarter
August 31, 2020
- Despite market uncertainty due to COVID-19, the San Diego industrial market has seen a surge in leasing activity. For lease transactions in the 10,000 square feet or greater segment, the market signed 32 leases with an average lease size of 55,560 square feet that amounted to nearly 1.8 million in Q2 2020. In the previous three year span, Q2 has averaged 38 leases with a total quarterly average of 1.4 million.
- After the slowest Q1 start in three years, where only 932,000 square feet of industrial low finish (manufacturing and warehouse/distribution) product was signed, Q2 activity rose 90 percent quarter-over-quarter. The first half of 2020 has surpassed the first half of 2019, a year that posted almost 6 million square feet of leasing volume.
- The high-in-demand e-commerce industry has played a vital role in the well performing industrial market. In Q2 alone, an e-commerce giant signed two new leases which are expected to add 606,000 square feet to their San Diego footprint and was responsible for 34 percent of the quarter’s volume.
- Outside of the Poway submarket, which was responsible for one of the large e-commerce transactions in Q2, the Otay Mesa submarket posted 250,000 square feet of lease transactions which continues to reflect strong tenant demand in the South County Cluster.