About a quarter of downtown San Diego\u2019s office space is sitting unused, according to third quarter data from CBRE, which says the area is in a transition period as companies and investors alike reassess their needs.<\/p>\n
Matt Carlson, CBRE\u2019s executive vice president and co-head of U.S. office capital markets, said the Q3 vacancy rate was in the high 20% range, with future availability in the low 30s. He said a healthy vacancy rate would typically fall into the single digits. However, he did caveat this by saying some downtown buildings included in the numbers are being turned into residential space or hotels.\u00a0<\/p>\n
\u201cWe\u2019ve seen the urban centers and the West Coast all be slower to return back to their pre-pandemic normal,\u201d Carlson said.\u00a0<\/p>\n
Downtown San Diego is no different, he said. Fewer employees are working in the office, and other factors \u2014 including parking challenges and the city\u2019s ongoing homelessness crisis \u2014 continue to shape the market.<\/p>\n
\u201cBut if you start to slice and dice these different markets, the west end of Broadway, for example, is 14% vacant, which is not, you know, super low, but it’s not nearly as critical as what some of the stats are saying,\u201d he said.<\/p>\n
One example is 501 West Broadway, a Class A office building with amenities, such as a gym with a pool typically associated with newer construction or significant renovations. The property was purchased this summer by Daniel Negari, founder and CEO of XYZ.<\/p>\n
\u201cWe\u2019ve already signed three leases, and we have 18 leases pending, so we have quite a lot of activity. We\u2019re currently sitting in the mid 80s occupancy wise,\u201d Negari said.<\/p>\n
Negari acquired that building and 225 West Broadway from the Irvine Company, a private real estate investment company that once held a major presence downtown. Carlson said the shift from large-scale investment firms to newer owners with smaller portfolios in the area is a recent change.\u00a0<\/p>\n
\u201cIf you go back the last 14 years, there have been two owners that have owned half of downtown and that completely changes the market versus what we\u2019re seeing today, where at the end of this transition we\u2019re going to end up with no owner that owns more than maybe two buildings,\u201d he said.<\/p>\n
Negari said he plans to focus his portfolio on what he calls impact investing, projects intended to benefit the broader community, such as a farmers market or a holiday ice skating rink.<\/p>\n
\u201cWe\u2019re really looking to be that central meeting point to bring everybody together,\u201d he said.<\/p>\n
The San Diego Regional EDC also weighed in, sharing a statement from its president and CEO, Mark Cafferty, who acknowledged both the challenges and opportunities in the area.<\/p>\n
\u201cWe have certainly seen challenges in Downtown San Diego, as well as seismic shifts in work and office needs, culture, and practices post-pandemic. But we have also seen foot traffic to Downtown businesses rebound, recapturing 99 percent of pre-pandemic activity. We have seen globally-renowned conferences and companies leading breakthrough innovation choose Downtown San Diego as their new homes. All this is possible through continued collaboration between new and legacy players who are actively helping to redefine our urban core. Now is a critical opportunity for these local players to double down and continue investing in new plans, new ideas, and a new vision for a reimagined, competitive, and resilient Downtown,” the statement read.<\/p>\n
This story was originally reported for broadcast by NBC San Diego. AI tools helped convert the story to a digital article, and an NBC San Diego journalist edited the article for publication.<\/p>\n","protected":false},"excerpt":{"rendered":"About a quarter of downtown San Diego\u2019s office space is sitting unused, according to third quarter data from…\n","protected":false},"author":3,"featured_media":444161,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5134],"tags":[5229,1582,276,8315,3549,7264,67,586,132,5230,68,2969],"class_list":{"0":"post-444160","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-san-diego","8":"tag-america","9":"tag-ca","10":"tag-california","11":"tag-downtown-san-diego","12":"tag-san-diego","13":"tag-sandiego","14":"tag-united-states","15":"tag-united-states-of-america","16":"tag-unitedstates","17":"tag-unitedstatesofamerica","18":"tag-us","19":"tag-usa"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/444160","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=444160"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/444160\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/444161"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=444160"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=444160"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=444160"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}