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While Sorrento Mesa should benefit from large tenant spillover because of the tightness of UTC adjacent, it just is not reflected in the numbers yet as availability rates have actually bumped up in Sorrento to 21.2% this last quarter. Even tight markets like Kearny Mesa saw an uptick in office availability with Bridgepointe Education vacating their tower and moving to Arizona. If you are requiring two floors of contiguous Class A space, it literally does not exist!Įvery other office submarket in San Diego County has become somewhat anemic.

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The UTC office market is so tight that 10 of UTC‘s Class A office buildings are 100% leased, and if you are a full floor office tenant between 15,000 and 25,000 square feet, there are only two office buildings that can accommodate your requirement today.

These two significant events, along with another dozen financial services and technology company expansions in UTC have driven time on the market down from 15 months on average to 7.3 months this last quarter, the lowest in the county and one of the shortest in history. Samumed’s leasing of the former Amylin Pharmaceuticals headquarters building of 74,000 square feet also made a big dent in availability, pulling a building off of the market that had been available for sublease since Amylin sold it to BMS years ago.

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Major drivers include Apple’s lease of The Irvine Company’s 96,000 square-foot Eastgate Terrace building, which had been for lease for two years. The UTC availability percentage is literally half of virtually every other submarket in the region, and a third relative to the languishing office markets of Carlsbad and Sorrento Mesa. Never before has a San Diego county office submarket improved so radically, so quickly, and broken away from the pack of all of the other submarkets.

While total availability of all combined industrial, lab and office space countywide increased again slightly this last quarter, UTC alone had its availability rate literally cut in half from 16% at the end of 2018 to 8% at the end of the first quarter in 2019.

This first quarter of 2019 continued with a “ho-hum” reaction to the commercial real estate market in San Diego County, with one exception-the unprecedented recovery of both office and lab space in the UTC market. Portfolio Lease Administration & Advisory.Program, Project & Construction Management.

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