Considered the birthplace of California, San Diego is the economic hub of the region and boasts thriving military, tourism, trade and manufacturing sectors. At the end of 2016, the unemployment rate fell at a post-recession low of 4.2 percent.
Commercial investment in the area is thriving, with a high demand for restaurant space and multi-family housing. According to a report from Coldwell Banker Commercial released in April, multi-family vacancy rates have decreased to below 3 percent and a mere 3,000 units will become available this year, despite the 8,000 units currently under construction.
Projects like the Troll extension, which will extend the trolley from Old Town to UC San Diego, are expected to boost construction and employment prospects over the coming four years. And if you haven’t heard already, the a property called Campus Marketplace by UC San Marcos just traded for more than $74 million.
To say the least, San Diego is in the big leagues when it comes to commercial investing.
Overall, the commercial real estate market in the U.S. is projected to gradually improve. National market trends indicate that increased employment rates and steady growth in the nation’s Gross Domestic Product (GDP) are boosting consumer confidence. To boot, investors are leveraging technologies such as the Internet of Things (IoT), cloud computing and advanced analytics to improve efficiency, spot deals and maintain a competitive edge.
This week, we opted to take a closer look at the bustling city of San Diego. Here’s a quick rundown of the city’s market outlook as of June 2016 from the folks over at LoopNet:
Multifamily
The median asking price per unit has increased 7.5 percent in comparison to the prior three months of the report’s release and 19.1 percent in the last year. In the county, asking prices have increased by 6.6 percent. The average asking price in the city is $261,744 per unit in comparison to the county, which is $240,763.
Office
The median asking price per square foot has decreased by 1.7 percent in comparison to the prior three months to the report’s release and has increased 5.2 percent in the last year. The cost of office space is up .8 percent at $280 above the city’s median price of $261 per square foot. As of June 16, the average asking rental rate per square foot was $25.24 per year, which is an increase of .5 percent over the three months prior to the report’s release.
Industrial
The median asking price per square foot is up 2.6 percent in comparison to the three months prior to the report’s release and 6.7 percent in the last year. Asking prices in the county are up 3.4 percent at $157 per square foot in comparison to the city’s median price of $164 per square foot. Average rental rates in the city sit at $13.80 per square foot per year, which is an increase of .7 percent in comparison to the three months prior to the report’s release.
Retail
The median asking price per square foot increased by 7.2 percent in comparison to the three months prior to the report’s release and a decrease of 9.1 percent in the last year. In the county, asking prices are 3.3 percent higher at $227 per square foot in comparison to the city’s median price of $235 per square foot. Average rental rates sit at $26.36 per square foot, which is a decrease of 2.5 percent in comparison to the three months prior to the report’s release.
Looking for commercial real estate properties in the San Diego, CA area? Or have questions about investing and want to learn more about the San Diego market?
Contact Terry Moore at 760.201.1017 or fill out a contact form and Terry will get to work for you!