San Diego Industrial Figures 2026 Q2

Market Overview 

In Q2 2026, the industrial market recorded positive net absorption of 132,000 sq. ft. This marked a vast improvement over the previous quarter’s negative 408,000 sq. ft. Vacancy decreased 20 basis points (bps) quarter over quarter (Q-o-Q) while remaining unchanged year over year (Y-o-Y). Availability also reduced 10 bps Q-o-Q to 9.6%; but increased 50 bps from the previous year. Average asking rents fell $0.01 (0.7%) from Q1 2026 and was $0.13 (8.5%) lower than the year before. Under construction (944,000 sq. ft.) remained relatively the same Q-o-Q, but substantially less than the 2,100,000 sq. ft. experienced the previous year. The market also recorded five lease transactions of 100,000 sq. ft. or more during the quarter.

Since Q2 2023, the market has accumulated 2.4 million sq. ft. of negative net absorption. Over the same three-year period, developers have delivered over 5.4 million sq. ft. of new product. As a result, overall vacancy has increased by 280 bps, and availability rose 310 bps over that timeframe. The combination of tepid demand, higher vacancy and availability illustrates a market still navigating current existing space, while also trying to negotiate an influx of recently added inventory.