San Diego Office Market Report

The following reflects San Diego office market conditions as of 2Q 2026.

MARKET DRIVERS

San Diego’s office vacancy rate rose 40 basis points year-over-year to 13.4% in 2Q26, holding flat quarter-over-quarter. Total availability increased 20 bps over the quarter to 16.3%, unchanged from the same period last year.

Leasing activity totaled 937,621 SF in 2Q26, a 25.9% decrease from the 1.3M SF recorded in 2Q25. Direct net absorption was negative 171,946 SF for the quarter, bringing cumulative 2026 direct absorption to negative 133.0K SF as occupiers continued to give back space despite steady transaction activity.

Office sales reached 717,575 SF in 2Q26, totaling $160.6M in dollar volume. Quarterly traded square footage fell 56.7% year-over-year, but year-to-date sales activity reached 3.2M SF, up 34.2% from the same point last year, with average pricing improving to $233.08 PSF.

ECONOMIC REVIEW

San Diego County’s unemployment rate stood at 3.9% in May 2026, down from 4.1% in April and below California’s statewide rate of 5.3%. The improvement gives the local market a more stable labor backdrop, though statewide labor conditions remain mixed.

Total nonfarm employment in the San Diego metro area grew from 1,563.5K to 1,584.9K jobs between January and May 2026. Professional and Business Services added 2.6K jobs during that period, while Information employment remained soft at 17.0K jobs, down 6.1% year-over-year.

NEAR-TERM OUTLOOK

San Diego’s office market remained mixed but generally stable during 2Q26, as vacancy held steady despite negative quarterly absorption. Leasing activity continued at a healthy pace, led by several mid-sized transactions across a range of submarkets, reflecting sustained demand from tenants seeking quality space rather than broad market expansion. Sales activity also remained bifurcated, with owner-user demand supporting well-located assets while downtown properties continue to undergo repricing and repositioning. Looking ahead, elevated availability should continue to provide tenants with negotiating leverage, though limited new construction and improving demand for high-quality properties are expected to support overall market stability through the remainder of 2026.

Frequently Asked Questions

What is the San Diego office vacancy rate in 2Q 2026?

San Diego’s office vacancy rate held at 13.4% in 2Q 2026, unchanged from the prior quarter but up 40 basis points year-over-year, according to Kidder Mathews research. Total availability, which includes sublease space, rose to 16.3% for the quarter. (Data source: CoStar)

What is the office availability rate in San Diego for 2Q 2026?

Total office availability in San Diego reached 16.3% in 2Q 2026, up 20 basis points from the prior quarter but flat year-over-year, according to Kidder Mathews research. Availability includes all space marketed for lease, including sublease space, and remains elevated relative to direct vacancy.

What are average asking office rents in San Diego in 2Q 2026?

The average asking office rent in San Diego was $3.15 PSF FSG per month in 2Q 2026, up 1.6% year-over-year, according to Kidder Mathews research. Rates varied by submarket, ranging from roughly $1.99 PSF in submarkets like Poway to $4.75 PSF in Del Mar Heights/Carmel Valley. (Data source: CoStar)

How much office leasing activity occurred in San Diego in 2Q 2026?

Office leasing activity totaled 937,621 SF in San Diego during 2Q 2026, a 25.9% decrease from the 1.3M SF leased in 2Q 2025, according to Kidder Mathews research. Year-to-date leasing reached 2,071,951 SF, down 14.9% from the same period in 2025. (Data source: CoStar)

What was net absorption for San Diego office space in 2Q 2026?

Net absorption was negative 171,946 SF in San Diego’s office market during 2Q 2026, meaning tenants vacated more space than they occupied. This brought year-to-date net absorption to negative 132,950 SF, compared with negative 56,118 SF over the same period in 2025, according to Kidder Mathews research. (Data source: CoStar)

How much new office space is under construction in San Diego?

No new office space was delivered in San Diego during 2Q 2026, according to Kidder Mathews research. The largest project underway is 10210 Campus Point Dr in the UTC submarket, a 466,592-SF building owned by Alexandria Real Estate Equities scheduled to deliver in 1Q 2028. (Data source: CoStar)

What was the largest office sale in San Diego in 2Q 2026?

The largest office sale in San Diego during 2Q 2026 was Kettner & Ash in the Downtown submarket, a 123,079-SF building that sold for $30.5 million, or $247.81 per square foot, according to Kidder Mathews research. The Conrad Prebys Foundation purchased the property from Divco West Services, LLC. (Data source: CoStar)

How much office investment activity occurred in San Diego in 2Q 2026?

San Diego office sales totaled 717,575 SF in 2Q 2026, representing $160.6 million in dollar volume, according to Kidder Mathews research. While quarterly sales volume fell 56.7% year-over-year, year-to-date sales reached 3.2M SF, up 34.2% from the same point in 2025, with average pricing improving to $233.08 PSF. (Data source: CoStar)

What was the largest office lease signed in San Diego in 2Q 2026?

The largest office lease signed in San Diego during 2Q 2026 was a 37,986-SF transaction at 4305 University Ave in the College Area submarket, according to Kidder Mathews research. Price Philanthropies Foundation leased the space to Central Region Child Welfare Services in June 2026. (Data source: CoStar)

What is the outlook for the San Diego office market?

The San Diego office market is expected to remain generally stable through the rest of 2026, with elevated availability continuing to give tenants negotiating leverage, according to Kidder Mathews research. Limited new construction and improving demand for high-quality space are expected to support overall market stability. (Data source: CoStar)

Last updated: 2Q 2026. Data source: CoStar, BLS, EDD, San Diego Business Journal, Prebys Foundation. Compiled by the Kidder Mathews Research Group.

2Q 2026 San Diego Office Market: Key Data Points

Explore our full San Diego office market review for deeper insights into leasing trends, sale activity, and submarket performance.

Vacancy Rate Holds Steady: San Diego’s office vacancy rate remained unchanged from the prior quarter at 13.4%, though it increased 40 basis points year-over-year.
Asking Rents Continue to Rise: Average asking rents increased to $3.15 PSF FSG, up 1.6% year-over-year, reflecting continued pricing stability despite elevated availability.
Leasing Activity Near 1M SF: Office leasing totaled 937,621 SF during 2Q 2026, demonstrating continued tenant demand across multiple submarkets.
Negative Net Absorption Persists: Direct net absorption totaled negative 171,946 SF during the quarter, bringing year-to-date absorption to negative 132,950 SF as some occupiers continued to reduce footprints.
Investment Activity Strong Year-to-Date: Office sale transactions reached 3.2M SF year-to-date, a 34.2% increase compared with the same period last year, despite lower quarterly sales volume.
Limited New Supply: No new office deliveries were completed during 2Q 2026, helping constrain future inventory growth and support overall market fundamentals.

Submarket Statistics

Submarket	Total Inventory (SF)	Total Vacancy Rate	Total Availability Rate	2Q26 Total Net Absorption (SF)	YTD Total Net Absorption (SF)	2Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate

San Diego Office Submarket Statistics 2Q26 — North County: includes Carlsbad, Escondido, Oceanside, San Marcos, Vista
Submarket	Total Inventory (SF)	Total Vacancy Rate	Total Availability Rate	2Q26 Total Net Absorption (SF)	YTD Total Net Absorption (SF)	2Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Carlsbad	6,888,466	15.8%	24.9%	-7,483	-78,646	90,077	157,788	$2.70
Escondido	1,774,581	11.2%	19.8%	5,759	-5,822	2,710	9,401	$2.37
Oceanside	1,550,821	8.6%	10.6%	-24,083	-17,127	14,075	20,604	$2.98
San Marcos	1,436,843	8.1%	8.0%	-3,110	-4,640	11,525	15,067	$2.50
Vista	1,098,033	14.9%	18.2%	-30,027	-17,693	6,122	18,166	$2.45
North County	12,748,744	13.4%	20.1%	-58,944	-123,928	124,509	221,026	$2.64

San Diego Office Submarket Statistics 2Q26 — I-15 Corridor: includes Poway, Rancho Bernardo, Scripps Ranch
Submarket	Total Inventory (SF)	Total Vacancy Rate	Total Availability Rate	2Q26 Total Net Absorption (SF)	YTD Total Net Absorption (SF)	2Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Poway	1,203,914	5.2%	6.5%	6,605	2,232	1,591	30,707	$1.99
Rancho Bernardo	6,616,188	7.9%	17.1%	-30,406	-14,298	27,572	260,982	$3.42
Scripps Ranch	2,668,454	18.3%	22.8%	78,337	62,904	30,304	65,435	$2.98
I-15 Corridor	10,488,556	10.2%	17.4%	54,536	50,838	59,467	357,124	$3.14

San Diego Office Submarket Statistics 2Q26 — North Cities: includes Del Mar Heights/Carmel Valley, Governor Park, La Jolla, Miramar, North Beach Cities, Sorrento Mesa, Sorrento Valley, Torrey Pines, UTC
Submarket	Total Inventory (SF)	Total Vacancy Rate	Total Availability Rate	2Q26 Total Net Absorption (SF)	YTD Total Net Absorption (SF)	2Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Del Mar Heights/Carmel Valley	6,380,704	8.8%	14.5%	-5,726	-55,428	95,803	229,877	$4.75
Governor Park	772,818	5.5%	21.3%	-1,069	-13,499	2,944	2,944	$3.21
La Jolla	1,319,537	14.9%	15.5%	22,983	38,945	44,430	78,515	$3.89
Miramar	982,864	9.1%	17.4%	-11,861	-7,921	748	9,120	$2.32
North Beach Cities	2,538,540	10.7%	15.1%	-4,421	-24,127	31,572	50,682	$4.45
Sorrento Mesa	7,900,443	12.1%	16.9%	-129,449	-179,161	48,883	91,511	$3.20
Sorrento Valley	482,903	15.5%	15.5%	7,661	298	12,689	15,956	$2.52
Torrey Pines	2,884,638	3.1%	6.3%	6,479	9,156	13,487	17,362	$3.83
UTC	8,997,400	10.2%	19.9%	28,972	-25,995	126,382	234,476	$3.85
North Cities	32,259,847	9.9%	16.4%	-86,431	-257,732	376,938	730,443	$3.83

San Diego Office Submarket Statistics 2Q26 — Central Suburban: includes Kearny Mesa, Mission Gorge, Mission Valley, Old Town/Sports Arena/Pt. Loma, PB/Rose Canyon/Morena
Submarket	Total Inventory (SF)	Total Vacancy Rate	Total Availability Rate	2Q26 Total Net Absorption (SF)	YTD Total Net Absorption (SF)	2Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Kearny Mesa	11,320,333	8.1%	11.1%	67,546	71,518	64,838	112,507	$2.73
Mission Gorge	578,819	3.8%	4.0%	0	184	4,520	8,223	$2.04
Mission Valley	7,579,024	13.9%	13.9%	24,234	103,267	101,143	208,421	$3.14
Old Town/Sports Arena/Pt. Loma	2,294,499	9.0%	12.7%	-8,807	-32,929	8,506	13,541	$2.74
PB/Rose Canyon/Morena	1,196,889	5.4%	8.9%	-4,349	17,479	4,146	24,558	$2.71
Central Suburban	22,969,564	9.9%	11.9%	78,624	159,519	183,153	367,250	$2.85

San Diego Office Submarket Statistics 2Q26 — East County: includes College Area, East County
Submarket	Total Inventory (SF)	Total Vacancy Rate	Total Availability Rate	2Q26 Total Net Absorption (SF)	YTD Total Net Absorption (SF)	2Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
College Area	1,252,719	4.4%	5.8%	-2,405	-1,133	44,315	52,897	$2.50
East County	3,801,775	3.9%	5.3%	-6,422	7,028	10,681	27,076	$2.79
East County	5,054,494	4.0%	5.5%	-8,827	5,895	54,996	79,973	$2.72

San Diego Office Submarket Statistics 2Q26 — Uptown: includes Park East, Uptown East, Uptown West/Park West
Submarket	Total Inventory (SF)	Total Vacancy Rate	Total Availability Rate	2Q26 Total Net Absorption (SF)	YTD Total Net Absorption (SF)	2Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Park East	119,894	8.8%	9.4%	325	-2,425	0	1,051	$0.00
Uptown East	106,604	0.0%	0.0%	0	0	0	0	$0.00
Uptown West/Park West	2,097,607	8.5%	8.5%	-13,581	-5,181	18,150	25,175	$3.08
Uptown	2,324,105	8.1%	8.1%	-13,256	-7,606	18,150	26,226	$3.08

San Diego Office Submarket Statistics 2Q26 — Downtown: includes Downtown
Submarket	Total Inventory (SF)	Total Vacancy Rate	Total Availability Rate	2Q26 Total Net Absorption (SF)	YTD Total Net Absorption (SF)	2Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Downtown	16,208,300	33.3%	33.3%	-138,089	-958	91,669	216,679	$2.40
Downtown	16,208,300	33.3%	33.3%	-138,089	-958	91,669	216,679	$2.40

San Diego Office Submarket Statistics 2Q26 — South County: includes Chula Vista, Coronado, National City, Otay Mesa, San Ysidro/Imperial Beach, Southeast San Diego
Submarket	Total Inventory (SF)	Total Vacancy Rate	Total Availability Rate	2Q26 Total Net Absorption (SF)	YTD Total Net Absorption (SF)	2Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Chula Vista	3,077,718	5.4%	5.4%	-10,595	30,811	20,419	53,149	$2.92
Coronado	111,541	10.1%	10.1%	3,376	3,376	7,291	7,291	$0.00
National City	583,792	4.4%	4.7%	5,425	19,690	1,029	9,350	$2.62
Otay Mesa	251,537	26.3%	37.9%	0	-14,092	0	1,205	$2.96
San Ysidro/Imperial Beach	173,257	0.8%	1.5%	0	-998	0	0	$0.00
Southeast San Diego	481,600	0.2%	0.2%	2,235	2,235	0	2,235	$0.00
South County	4,679,445	5.8%	6.3%	441	41,022	28,739	73,230	$2.88

San Diego Office Market Total 2Q26 — combined totals for all submarkets
Submarket	Total Inventory (SF)	Total Vacancy Rate	Total Availability Rate	2Q26 Total Net Absorption (SF)	YTD Total Net Absorption (SF)	2Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
San Diego Total	106,733,055	13.4%	16.3%	-171,946	-132,950	937,621	2,071,951	$3.15

San Diego Office 2Q26 — Breakdown by building class
Submarket	Total Inventory (SF)	Total Vacancy Rate	Total Availability Rate	2Q26 Total Net Absorption (SF)	YTD Total Net Absorption (SF)	2Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Class A	42,735,168	17.3%	22.9%	-118,602	28,214	382,484	772,175	$3.62
Class B	50,012,554	11.8%	14.2%	-18,715	-136,088	502,088	1,181,672	$2.98
Class C	13,966,333	7.4%	8.0%	-35,129	-24,376	53,049	117,604	$2.45

Significant Sale Transactions 2Q 2026

San Diego Office Significant Sale Transactions 2Q 2026
Property	Submarket	SF	Sale Price	$/SF	Buyer	Seller
Kettner & Ash	Downtown	123,079	$30,500,000	$247.81	The Conrad Prebys Fdn.	Divco West Services, LLC
Northridge Summit	Scripps Ranch	129,919	$25,000,000	$192.43	Sorrento West Prop., Inc.	Divco West Services, LLC
RB Medical Plaza	Rancho Bernardo	75,598	$18,250,000	$241.41	Compass Capital Inv.	Virtus Real Estate Capital
5575 Ruffin Rd	Kearny Mesa	34,531	$12,075,000	$349.69	Equinvests Capital	Waterfall Asset Mgmt. \| Fenway Capital Advs., LLC
613 W Valley Pky	Escondido	53,001	$10,090,000	$190.37	KB Home	Baker Enterprises

Significant Lease Transactions 2Q 2026

San Diego Office Significant Lease Transactions 2Q 2026
Property	Submarket	SF	Transaction Date	Landlord	Tenant
4305 University Ave	College Area	37,986	June 2026	Price Philanthropies Foundation	Central Region Child Welfare Serv.
3860 Calle Fortunada	Kearny Mesa	29,747	April 2026	Joe Hernon	211 San Diego
3570 Carmel Mountain Rd	Del Mar Hts/Carmel Valley	26,219	April 2026	The Irvine Company	MG Properties, LLC
9775 Businesspark Ave	Scripps Ranch	25,266	April 2026	Bosch	JFK Family Trust
12531 High Bluff Dr *	Del Mar Hts/Carmel Valley	22,782	April 2026	Southwind Property Company	Wells Fargo

*Renewal

Significant Under Construction

San Diego Office Significant Under Construction 2Q 2026
Property	Address	Submarket	SF	Owner	Delivery
10210 Campus Point Dr	10210 Campus Point Dr	UTC	466,592	Alexandria Real Estate Equities	1Q 2028
San Diego Pace	1317 D Ave	National City	70,000	Kimball Tower Housing Associates, LP	3Q 2026
Cush Medical Plaza	Grossmont Center Dr	La Mesa	50,000	Rainbow Investment Company	2Q 2027
North Coast Medical Plaza II	6020 Hidden Valley Rd	Carlsbad	50,000	JT-Bressi, LLC	1Q 2027
Grand Hope Medical Office	2879-85 Hope Ave	Carlsbad	12,800	William J Cho	1Q 2027

Data as of 2Q 2026. Source: CoStar, BLS, EDD, San Diego Business Journal, Prebys Foundation. Prepared by the Kidder Mathews Research Group.

Contact

GARY BARAGONA
Vice President, Research
gary.baragona@kidder.com
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