San Diego office market faces continued pullback in leasing activity

In the second quarter 2024, the San Diego office market experienced a decline in leasing activity for the third consecutive quarter. Leasing activity decreased by 20.4% from the previous quarter to just under 0.9 million square feet (msf). This is also down from 1.1 msf reported a year ago. While the local economy continues to grow, office leasing conditions remain soft due to higher inflation, slowing office-using job growth and the ongoing correction in the tech and life sciences sectors. With two current office conversion projects, office inventory could decrease by 500,000 sf. This is a trend being observed throughout Southern California as functionally obsolete office buildings are targeted by investors for conversion or redevelopment.

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