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With 1.3 million square feet vacated countywide, Q3 industrial/R&D demand was nearly as
dismal as Q2 – one of the worst quarters on record. Over 5.6 million square feet has been
returned to the market during the past year. Unemployment has continued to rise,
particularly in the construction and manufacturing sectors.
Q3 combined industrial / R&D net absorption totaled a negative 1.3 million square feet.
Five submarkets posted over 100,000 square feet of negative net absorption while only
Carlsbad measured over 100,000 square feet of positive net absorption. Countywide, Q3 net
absorption for industrial space (manufacturing, warehouse, distribution, and
multi-tenant/incubator buildings) totaled a negative 945,860 million square feet and R&D
space (flex, wet lab and corporate headquarters buildings) totaled a negative 355,193
square feet.
Q3 vacancy increased by 0.9% to stand at 11.3%. The industrial and R&D vacancy components
measured 10.3% and 13.8%, respectively. Compared to one year ago, R&D vacancy increased
by 2.5% (11.3% in Q3 2008) while industrial vacancy increased by 3.1% (7.2% in Q3 2008).
With so much available space on the market, construction activity has come to a near halt.
Only 128,706 square feet was completed in Q3, bringing the year-to-date total to just
over 1.1 million square feet. An additional 121,984 square feet is under construction –
all concentrated within Vista. Once this is completed, there will be no new space under
construction in San Diego County.
Contact Chris Reutz at 858.677.5385 for more information.
  San Diego Knowledge Report - Industrial - 2009Q3.pdf
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