The Trends: San Diego Capital Markets series tracks property sales activity for the San Diego region and cap rate data from the CBRE North American Cap Rate Survey. The report includes local cap rates and sales by buyer and product type. This issue includes data for the second half of 2018 (H2 2018), updated last on February 2019.

Highlights:

  • After a slow start to the year, H2 2018 sales rebounded substantially due to strong sales volumes across the board, but most notably for office and industrial product. Total commercial and apartment sales were about even with the second half last year, but nearly double (+181%) H1 totals, with elevated price per sq. ft./unit across most asset types.
  • The Irvine Company and Ascendas-Singbridge were most active in the market, accounting for about one quarter of the commercial sales volume and nearly half of the office sales in particular. The Irvine Company’s three substantial office acquisitions commanded large per. sq. ft. price tags, with Paseo Del Mar exceeding $710. Stockdale’s acquisition of the Horton Plaza retail center was also among the largest deals of the half. Blackstone’s acquisition of a sprawling portfolio from RAF Pacifica drove a large portion of industrial investment.
  • Looking ahead in 2019, there is likely to be plenty of capital chasing deals in the market, but similar to 2018 investment activity, overall sales volume will depend on the number of sizable opportunities that hit the market. High-profile opportunities are likely to come from San Diego’s centralized suburban submarkets while stabilized assets in secondary suburban submarkets across the county are expected to trade hands.