Positivity surrounds the overall San Diego industrial market as 2019 closed. San Diego experienced its strongest year of leasing activity in three years, with tenants leasing more than 15.2 million sq. ft. in 2019. Construction activity is ample, with over 1.7 million sq. ft. of new product in the pipeline as of Q4. Several projects have delivered pre-leased, indicating that demand is strong for suitable industrial product. New deliveries, coupled with continued demand, pushed the average low-finish asking rate to an all-time high of $1.01 NNN. Despite some new product delivering vacant and several large-scale move-outs, strong leasing activity prevented vacancy from increasing from the previous two quarters. Employment growth continues to drive demand for industrial product. Employers in San Diego added 34,300 jobs (+2.3%) year over year in Q4, the most so far in 2019. Industrial and lab users added 12,900 jobs (+3.8%), also the highest quarter of the year.


  • Three projects across five properties delivered in Q4 2019, totaling 170,973 sq. ft., of which 53,458 sq. ft. delivered vacant.
  • Despite delivery of vacant product and several large scale move-outs, direct and total vacancy remained at 4.7% and 5.1%, respectively.
  • Few move-outs among lab tenants and the delivery of new occupied product led to strong net absorption for lab space, carrying overall net absorption for industrial product in San Diego.
  • Cisterra is underway on the new 250,000-sq.- ft. Corporate HQ/R&D product for Cubic Corporation in Kearny Mesa. More than 1.7 million sq. ft. was under construction at the end of 2019.