For the year ending June 30th San Diego recently placed 24th in a global ranking of cities based on commercial property investment dollar volume. The tally represented a 47 percent jump from the prior 12-month timeframe. Moreover, based on some ultra-high-price-tag deals of the past few weeks, it looks like San Diego is inclining for another strong finish in the global Top 25. National investors are now paying more attention to San Diego and prices are expected to skyrocketing amid the growth of potential bidders commercial properties as have seen in New York, Los Angeles, San Francisco…etc. San Diego’s office vacancy stood at 13.2 percent at the end of third quarter and the local market saw “peak levels” for net absorption and leasing activity based on recent CBRE Group reports. Among key factors contributing to rising office rents and declining vacancies including 2.6 percent growth in local employment. Investors from China and Canada are increasingly shopping the local and national markets. Purchase prices will be higher in coming months because of the rising demand and rent growth.
Excerpts from the Article:San Diego recently placed 24th in a global ranking of cities based on commercial property investment dollar volume for the year ending June 30. More than $7.1 billion in deals – involving office, industrial, retail, hospitality and multifamily properties – were completed locally in that period, according to the brokerage company Cushman & Wakefield Inc. The pool of buyers and capital sources is rising, with pension funds and other institutional players looking to put their money into properties, and LaChapelle said investors from outside the U.S., especially from China and Canada, are increasingly shopping the local and national markets. Rising demand and rent growth is likely to drive purchase prices higher in coming months, and also encourage more owners of older buildings to invest in significant renovations to make them attractive to tenants and buyers, said Chad Urie, executive vice president in JLL’s San Diego office.
Citation and link:
Hirsh, Lou. “Into the Spotlight – National Investors Find Deals in San Diego Market.” SDBJ News., 14 Nov. 2014 Web. 17 Nov. 2014.