San Diego Office Figures 2026 Q2

Market Overview 

San Diego’s office market concluded H1 2026 with demand returning to negative territory. The metro realized 135,000 sq. ft. of negative net absorption in Q2, following a Q1 that saw positive demand for the first time since Q4 2024. Weakness was pervasive as just one submarket, Southwest Riverside, posted positive net absorption and similarly, all property classes had negative demand. Still, net absorption improved by 159,000 sq. ft. compared with the same period one year earlier. Moreover, leasing activity picked up compared to both Q1 and last year’s first half.

Metro vacancy fell 40 basis points (bps) quarter-over-quarter (Q-o-Q) to 13.8%, supported by a modest reduction in inventory and the absence of supply-driven pressure. Year-over-year (Y-o-Y), the vacancy rate was down by 60 bps. The total availability rate decreased to 18.9%, matching its lowest level since Q4 2023.

Local landlords, despite the uneven demand in recent years, have held firm on asking rents, and that trend continued in Q2. The average rent was $3.55 per sq. ft., an increase both Q-o-Q and Y-o-Y. Strength was widespread as rents fell in only one submarket, South San Diego.