San Diego technology and FIRE companies top office leasing volume
During the last cycle peak, Finance, Insurance, and Real Estate (FIRE) dominated San Diego’s office leasing.
April 23, 2019
- During the last cycle peak, Finance, Insurance, and Real Estate (FIRE) dominated San Diego’s office leasing. While FIRE industries saw a significant decrease during the trough of this current cycle, FIRE companies are back in expansion mode leasing up Class A buildings to recruit and retain young talent.
- Examples of FIRE companies moving into new projects include Encore Capital relocating to Ampersand in Mission Valley and Compass Real Estate and Deloitte leasing at One Paseo in Del Mar. According to the BLS, the jobs numbers support the financial services surge in leasing activity adding nearly 8,000 jobs since 2010 to a total of 75,000 for the market, which is still significantly lower from the last peak in 2007 at 84,500 employed.
- During this cycle’s low point in 2010, technology companies in the defense, software, and communications segments rebounded and took advantage of low asking rents, topping the market’s leasing share.
- Technology as well as the life sciences and healthcare sectors are expanding their footprints in Rancho Bernardo, Scripps Ranch, Carlsbad, Del Mar, UTC, Eastgate, Sorrento Mesa, and Mission Valley submarkets, which have been the driving force for rent premiums.
- Newly delivered speculative and creative renovated projects have set some of the highest quoted asking rates at the $4 to $5 per square foot range, causing rents to exceed the last cycle peak in 2007 by 6.4 percent.
Source: JLL Research, BLS