San Diego Office Market Report

The following reflects San Diego office market conditions as of Q3 2026.

MARKET DRIVERS

The San Diego office market vacancy rate declined 20 basis points (bps) quarter-over-quarter (QOQ) and 20 bps year-over-year (YOY) to 15.0% in 3Q26. Total availability remained flat over the quarter at 18.0% and declined 10 bps from the same time last year.

Leasing activity totaled 1.2M SF in 3Q26, a 31.2% decrease from the 1.8M SF recorded in 3Q25. Direct net absorption turned positive at 64.2K SF, improving year-to-date direct absorption to negative 136.6K SF compared with negative 553.1K SF through the same period last year.

Office sales reached 1.0M SF in 3Q26, totaling $238.9M in dollar volume. While quarterly traded square footage fell 35.4% YOY, year-to-date sales volume reached 4.2M SF, up 1.4% from the same point last year. Average pricing was $230.38/SF during the quarter.

ECONOMIC REVIEW

In August 2026, San Diego County’s unemployment rate was recorded at 4.9%, up from 4.7% in July and below California’s seasonally adjusted 5.1% rate. The local rate has moved higher from its spring lows, indicating some softening in labor conditions entering the final months of the year.

The San Diego-Chula Vista-Carlsbad MSA totaled approximately 1,567.0K nonfarm jobs in August 2026, up 0.7% YOY. Professional and Business Services employment measured 263.9K jobs and was flat YOY, while Information employment remained soft at 17.0K jobs, down 6.6% from one year earlier.

NEAR-TERM OUTLOOK

San Diego’s office market showed signs of stabilization in 3Q26, as positive absorption and declining vacancy suggested improving occupancy despite softer leasing demand. Year-to-date total absorption reached 27.7K SF, compared with negative 586.4K SF a year earlier, indicating a meaningful improvement in market fundamentals. Recent activity included Scripps Clinic’s 146.0K SF renewal in Rancho Bernardo and First Citizens Bank’s $95.5M acquisition of High Bluff Ridge, highlighting demand for established locations and quality assets. Looking ahead, the 618.5K SF construction pipeline remains concentrated in Campus Point and medical developments. Limited conventional office supply could support further stabilization, although older, less competitive properties will likely face continued challenges.

Frequently Asked Questions

What is the San Diego office vacancy rate in Q3 2026?

The San Diego office vacancy rate was 15.0% in Q3 2026, down 20 basis points from 15.2% in Q2 2026 and down 20 basis points from 15.2% in Q3 2025, according to Kidder Mathews research. By building class, Class A vacancy was 20.6%, Class B was 12.2%, and Class C was 7.5%. Downtown recorded the highest submarket vacancy at 33.1%, followed by Sorrento Mesa at 25.8%. (Data source: CoStar)

What is the office availability rate in San Diego for Q3 2026?

San Diego office total availability was 18.0% in Q3 2026, unchanged from Q2 2026 and down 10 basis points from 18.1% in Q3 2025, according to Kidder Mathews research. Sublet availability accounted for 2.0% of inventory. Downtown had the highest submarket availability at 30.7%, followed by Sorrento Mesa at 28.7%. (Data source: CoStar)

How much office space was leased in San Diego in Q3 2026?

San Diego office leasing activity totaled 1,241,182 SF (1.2M SF) in Q3 2026, a 31.2% decrease from the 1.8M SF recorded in Q3 2025, according to Kidder Mathews research. Year-to-date 2026 leasing reached 3,854,148 SF, down 11.0% from 4,328,425 SF through the same point in 2025. UTC led all submarkets in the quarter with 225,954 SF, followed by Rancho Bernardo with 175,560 SF. (Data source: CoStar)

What was San Diego office net absorption in Q3 2026?

San Diego office direct net absorption was positive 64,158 SF (64.2K SF) in Q3 2026, according to Kidder Mathews research. Net absorption measures the change in occupied space, so a positive figure means more space was occupied than vacated during the quarter. Year-to-date direct absorption improved to negative 136.6K SF from negative 553.1K SF through the same period last year. (Data source: CoStar)

What are average office asking rents in San Diego in Q3 2026?

The average San Diego office asking rent was $3.18 per SF per month on a full service gross (FSG) basis in Q3 2026, up from $3.15 in Q2 2026 and up 2.3% from $3.11 in Q3 2025, according to Kidder Mathews research. Submarket rental rates ranged from $2.04 in Mission Gorge to $4.89 in Del Mar Heights/Carmel Valley. By class, Class A averaged $3.64, Class B averaged $2.99, and Class C averaged $2.40. (Data source: CoStar)

How much office space is under construction in San Diego in Q3 2026?

San Diego has a 618.5K SF office construction pipeline in Q3 2026, concentrated in Campus Point and medical developments, according to Kidder Mathews research. The largest project is 10210 Campus Point Dr in UTC, a 466,592 SF development owned by Alexandria Real Estate Equities with delivery expected in 1Q 2028. No new office space was delivered in Q3 2026. (Data source: CoStar)

How much office space sold in San Diego in Q3 2026?

San Diego office sales totaled 1.0M SF (1,037,096 SF) and $238.9M in dollar volume in Q3 2026, according to Kidder Mathews research. Quarterly traded square footage fell 35.4% year-over-year, while year-to-date sales volume reached 4.2M SF, up 1.4% from the same point last year. Average pricing was $230.38 per SF during the quarter. (Data source: CoStar)

What was the largest office sale in San Diego in Q3 2026?

The largest San Diego office sale in Q3 2026 was High Bluff Ridge in the Del Mar Heights/Carmel Valley submarket, which sold for $95,475,000 ($578.84 per SF) for 164,943 SF, according to Kidder Mathews research. First Citizens Bank was the buyer and Southwind Property Co. and PGIM, Inc. were the sellers. The next largest sale was Bernardo Executive Center in Rancho Bernardo at $26,500,000 for 173,265 SF. (Data source: CoStar)

What was the largest office lease in San Diego in Q3 2026?

The largest San Diego office lease in Q3 2026 was Scripps Clinic’s 145,998 SF renewal at 15004 Innovation Dr in Rancho Bernardo, signed in August 2026 with landlord LaSalle Investment Management, according to Kidder Mathews research. The second largest was the County of San Diego’s 60,000 SF renewal at 3666 Kearny Villa Rd in Kearny Mesa in July 2026. (Data source: CoStar)

How is the San Diego economy affecting the office market in Q3 2026?

San Diego County’s unemployment rate was 4.9% in August 2026, up from 4.7% in July and below California’s seasonally adjusted rate of 5.1%, according to the California Employment Development Department. The San Diego-Chula Vista-Carlsbad MSA totaled approximately 1,567.0K nonfarm jobs, up 0.7% year-over-year. Professional and Business Services employment was 263.9K jobs and flat year-over-year, while Information employment was 17.0K jobs, down 6.6%. (Data source: BLS, EDD)

What is the outlook for the San Diego office market after Q3 2026?

Kidder Mathews research indicates the San Diego office market showed signs of stabilization in Q3 2026, as positive absorption and declining vacancy suggested improving occupancy despite softer leasing demand. Limited conventional office supply could support further stabilization, although older, less competitive properties will likely face continued challenges. The construction pipeline of 618.5K SF remains concentrated in Campus Point and medical developments. (Data source: CoStar)

Last updated: Q3 2026. Data source: CoStar, BLS, EDD. Compiled by the Kidder Mathews Research Group.

Q3 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 and availability: The vacancy rate declined 20 bps QOQ and 20 bps YOY to 15.0%. Total availability held at 18.0%, down 10 bps from a year earlier.
Leasing activity: Leasing totaled 1.2M SF in 3Q26, a 31.2% decrease from the 1.8M SF recorded in 3Q25. Year-to-date leasing reached 3,854,148 SF.
Net absorption: Direct net absorption turned positive at 64.2K SF in 3Q26. Year-to-date direct absorption improved to negative 136.6K SF from negative 553.1K SF a year earlier.
Asking rents: The average asking rent rose to $3.18/SF/month FSG, up 2.3% from $3.11 in 3Q25.
Sales volume: Sales reached 1.0M SF and $238.9M in 3Q26 at an average of $230.38/SF. Year-to-date sales volume reached 4.2M SF, up 1.4% from the same point last year.
Largest sale: First Citizens Bank acquired High Bluff Ridge in Del Mar Heights/Carmel Valley for $95,475,000 ($578.84/SF).
Construction pipeline: 618.5K SF of office space is under construction, led by the 466,592 SF development at 10210 Campus Point Dr in UTC. No new space was delivered in 3Q26.

Submarket Statistics

Submarket	Total Inventory (SF)	Total Vacancy Rate	Sublet Availability Rate	Total Availability Rate	YTD Total Net Absorption (SF)	3Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate

San Diego Office Submarket Statistics 3Q26 — North County: includes Carlsbad, Escondido, Oceanside, San Marcos, Vista
Submarket	Total Inventory (SF)	Total Vacancy Rate	Sublet Availability Rate	Total Availability Rate	YTD Total Net Absorption (SF)	3Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Carlsbad	6,954,545	16.4%	2.6%	24.3%	-75,359	88,127	288,734	$2.70
Escondido	1,798,608	11.6%	4.9%	17.9%	-15,966	7,622	17,023	$2.38
Oceanside	1,561,137	8.7%	0.2%	10.8%	-18,272	2,350	24,565	$3.03
San Marcos	1,428,791	6.2%	2.9%	8.3%	18,957	3,352	18,419	$2.51
Vista	1,085,524	16.5%	3.4%	22.3%	-35,353	28,053	46,219	$2.31
North County	12,828,605	13.6%	2.7%	19.9%	-125,993	129,504	394,960	$2.64

San Diego Office Submarket Statistics 3Q26 — I-15 Corridor: includes Poway, Rancho Bernardo, Scripps Ranch
Submarket	Total Inventory (SF)	Total Vacancy Rate	Sublet Availability Rate	Total Availability Rate	YTD Total Net Absorption (SF)	3Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Poway	1,284,824	5.8%	1.4%	6.1%	-9,884	7,403	10,594	$2.05
Rancho Bernardo	6,640,101	7.4%	0.7%	16.7%	45,918	175,560	659,674	$3.49
Scripps Ranch	2,668,454	16.2%	2.0%	16.9%	78,547	15,907	88,173	$2.98
I-15 Corridor	10,593,379	9.4%	1.1%	15.5%	114,581	198,870	758,441	$3.19

San Diego Office Submarket Statistics 3Q26 — 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	Sublet Availability Rate	Total Availability Rate	YTD Total Net Absorption (SF)	3Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Del Mar Heights/Carmel Valley	6,659,788	9.1%	2.1%	15.3%	41,928	112,045	403,070	$4.89
Governor Park	772,818	6.4%	2.4%	24.9%	-2,204	9,468	12,412	$3.18
La Jolla	1,296,399	14.2%	0.5%	14.7%	51,154	13,570	73,803	$4.10
Miramar	982,865	10.3%	0.3%	17.8%	-15,630	1,080	10,200	$2.12
North Beach Cities	2,536,034	11.4%	0.4%	13.0%	-40,678	41,435	111,221	$4.60
Sorrento Mesa	10,847,737	25.8%	2.7%	28.7%	-287,670	66,983	293,716	$3.16
Sorrento Valley	710,835	20.1%	5.6%	21.2%	4,884	2,195	18,151	$2.66
Torrey Pines	3,757,105	11.4%	1.9%	13.1%	-64,895	48,696	66,058	$3.63
UTC	10,043,746	13.9%	5.7%	23.1%	-54,389	225,954	462,312	$3.95
North Cities	37,607,327	16.0%	3.2%	21.5%	-367,500	521,426	1,450,943	$3.82

San Diego Office Submarket Statistics 3Q26 — 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	Sublet Availability Rate	Total Availability Rate	YTD Total Net Absorption (SF)	3Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Kearny Mesa	11,331,248	8.1%	2.5%	11.4%	43,370	90,663	230,046	$2.84
Mission Gorge	578,819	2.8%	0.0%	3.2%	5,582	1,531	10,619	$2.04
Mission Valley	7,431,273	11.5%	1.2%	14.1%	137,697	84,140	329,277	$3.16
Old Town/Sports Arena/Pt. Loma	2,296,438	9.3%	0.9%	13.3%	-29,559	18,696	36,093	$2.76
PB/Rose Canyon/Morena	1,214,362	6.3%	0.8%	10.4%	12,681	4,335	33,281	$2.74
Central Suburban	22,852,140	9.1%	1.8%	12.2%	169,771	199,365	639,316	$2.91

San Diego Office Submarket Statistics 3Q26 — East County: includes College Area, East County
Submarket	Total Inventory (SF)	Total Vacancy Rate	Sublet Availability Rate	Total Availability Rate	YTD Total Net Absorption (SF)	3Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
College Area	1,240,063	4.7%	0.0%	8.5%	-5,892	5,840	58,737	$2.08
East County	3,753,333	4.4%	0.1%	6.2%	-53,545	9,242	35,923	$2.77
East County	4,993,396	4.5%	0.0%	6.8%	-59,437	15,082	94,660	$2.60

San Diego Office Submarket Statistics 3Q26 — Uptown: includes Park East, Uptown East, Uptown West/Park West
Submarket	Total Inventory (SF)	Total Vacancy Rate	Sublet Availability Rate	Total Availability Rate	YTD Total Net Absorption (SF)	3Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Park East	102,644	1.2%	1.3%	10.1%	6,863	1,969	3,020	—
Uptown East	106,604	0.0%	0.0%	0.0%	0	0	0	—
Uptown West/Park West	2,103,925	9.2%	0.4%	9.2%	-20,082	6,378	31,553	$3.23
Uptown	2,313,173	8.4%	0.5%	8.8%	-13,219	8,347	34,573	$3.23

San Diego Office Submarket Statistics 3Q26 — Downtown: includes Downtown
Submarket	Total Inventory (SF)	Total Vacancy Rate	Sublet Availability Rate	Total Availability Rate	YTD Total Net Absorption (SF)	3Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Downtown	16,168,739	33.1%	0.9%	30.7%	87,240	154,133	389,086	$2.32
Downtown	16,168,739	33.1%	0.9%	30.7%	87,240	154,133	389,086	$2.32

San Diego Office Submarket Statistics 3Q26 — South County: includes Chula Vista, Coronado, National City, Otay Mesa, San Ysidro/Imperial Beach, Southeast San Diego
Submarket	Total Inventory (SF)	Total Vacancy Rate	Sublet Availability Rate	Total Availability Rate	YTD Total Net Absorption (SF)	3Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Chula Vista	3,078,015	4.9%	0.2%	4.4%	46,440	11,925	69,558	$2.76
Coronado	111,541	6.5%	0.0%	6.5%	7,333	779	8,070	—
National City	583,572	4.7%	0.0%	4.9%	18,476	0	9,350	$2.54
Otay Mesa	267,882	25.2%	0.0%	35.7%	-15,508	1,751	2,956	$2.92
San Ysidro/Imperial Beach	173,257	0.8%	0.0%	1.5%	-998	0	0	—
Southeast San Diego	481,600	0.2%	0.0%	0.2%	2,235	0	2,235	—
South County	4,695,867	5.4%	0.1%	5.9%	57,978	14,455	92,169	$2.74

San Diego Office Market Total Q3 2026 — combined totals for all submarkets
Submarket	Total Inventory (SF)	Total Vacancy Rate	Sublet Availability Rate	Total Availability Rate	YTD Total Net Absorption (SF)	3Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Total	112,052,626	15.0%	2.0%	18.0%	-136,579	1,241,182	3,854,148	$3.18

San Diego Office Q3 2026 — Breakdown by building class
Submarket	Total Inventory (SF)	Total Vacancy Rate	Sublet Availability Rate	Total Availability Rate	YTD Total Net Absorption (SF)	3Q26 Leasing Activity (SF)	YTD Leasing Activity (SF)	Direct Rental Rate
Class A	46,281,785	20.6%	2.9%	25.2%	207,058	784,818	2,050,584	$3.64
Class B	51,677,849	12.2%	1.6%	15.4%	-278,459	353,005	1,567,126	$2.99
Class C	14,092,992	7.5%	0.1%	7.7%	-65,178	103,359	236,438	$2.40

Significant Sale Transactions Q3 2026

San Diego Office Significant Sale Transactions Q3 2026
Property	Submarket	SF	Sale Price	$/SF	Buyer	Seller
High Bluff Ridge	Del Mar Hts/Carmel Valley	164,943	$95,475,000	$578.84	First Citizens Bank	Southwind Property Co. \| PGIM, Inc.
Bernardo Executive Ctr	Rancho Bernardo	173,265	$26,500,000	$152.94	Yasith Weerasuriya \| Nazi Masoum	Brookwood Financial Ptnrs., LLC
Ventana Office Park	Carlsbad	219,440	$24,500,000	$111.65	Orum Capital	Brookwood Financial Ptnrs., LLC
La Terraza Corporate Plz	Escondido	81,701	$11,607,000	$142.07	Land Value Mgmt. \| Tutelian & Co.	Peregrine Realty Ptnrs.
The Reserve	Carlsbad	19,896	$10,750,000	$540.31	Terra Vista Mgmt.	Fabric Investments

Significant Lease Transactions Q3 2026

San Diego Office Significant Lease Transactions Q3 2026
Property	Submarket	SF	Transaction Date	Landlord	Tenant	Lease Type
15004 Innovation Dr	Rancho Bernardo	145,998	August 2026	LaSalle Investment Management	Scripps Clinic	Renewal
3666 Kearny Villa Rd	Kearny Mesa	60,000	July 2026	PE Management Group	County of San Diego	Renewal
10182 Telesis Ct	Sorrento Mesa	43,942	July 2026	Manulife Financial Corporation	Whova Inc.	New Lease
3661 Valley Centre Dr	Del Mar Hts/Carmel Valley	27,220	August 2026	Kilroy Realty Corporation	Greenberg Traurig, LLP	New Lease
350 10th Ave	Downtown	19,396	August 2026	Divco West Services, LLC	Gensler	New Lease

Significant Under Construction

San Diego Office Significant Under Construction Q3 2026
Property	Address	Submarket	SF	Delivery Date	Owner
10210 Campus Point Dr	10210 Campus Point Dr	UTC	466,592	1Q 2028	Alexandria Real Estate Equities
San Diego Pace	1317 D Ave	National City	70,000	4Q 2026	Kimball Tower Housing Associates, LP
Cush Medical Plaza	Grossmont Center Dr	La Mesa	50,000	2Q 2027	Rainbow Investment Company
4350 El Cajon Blvd	4350 El Cajon Blvd	College Area	19,110	2Q 2027	Fairmount & El Cajon Realty, LLC
Grand Hope Medical Office	2879-85 Hope Ave	Carlsbad	12,800	1Q 2027	William J. Cho

Data as of Q3 2026. Source: CoStar, BLS, EDD. Prepared by the Kidder Mathews Research Group.

Contact

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