San Diego Industrial Market Report
Carlsbad
By the Numbers
- Vacancy Rate: 7.0%
- Rent Growth: 2.0%
- Absorption in SF: 323K
- Deliveries in SF: 218K
- Sales Volume: $70.9M | Last 12 Months | Source: CoStar Group
Market Overview
Carlsbad offers logistics enterprises convenient transportation routes near well-educated, densely populated areas along Interstate 5 and State Route 78. The city has become a landing site for new and expanding life science enterprises engaged in diagnostic work that require production facilities. Carlsbad has around 570,000 SF of sublease space available, accounting for 3.5% of its inventory. That marks the greatest level since 2010. Rent growth has been 2.0% year-over-year. Some landlords have started offering more free rent in order to close agreements, especially for larger premises. Concessions have become less common since tenant demand for small-bay users has remained consistent. Rent increase is not likely to recover to the long-term average before the end of 2025.
Oceanside
By the Numbers
- Vacancy Rate: 4.7%
- Rent Growth: 2.6%
- Absorption in SF: (197K)
- Sales Volume: $24.3M | Last 12 Months | Source: CoStar Group
Market Overview
Oceanside is San Diego’s northernmost coastal industrial submarket, with many freeways leading north and south and into the Inland Empire to the east. This allows for simple distribution of commodities around the San Diego region, while being placed in a dense population node in North County to fill area jobs. Net absorption has been -200,000 SF over the last four quarters. In 2022, the vacancy rate is expected to recover from a 10-year low of 0.4%. However, vacancy rates remain historically low. The long-term average stands at 7.8%. According to local brokers, there is still strong demand for smaller, classic industrial properties under 10,000 SF. Larker occupiers have seen the most moderate demand, and 50,000 SF acquisitions have dried up in recent quarters due to broader macroeconomic worries among such users. Small-bay demand has pushed leasing volume and will most likely continue to do so in the coming quarters.
