Class A Space in Short Supply As Companies Flock To Downtown San Diego

Daily Business Report — June 20, 2014
Written by SD Metro Magazine in Daily Business Report

The Inside View from Jason Hughes

 

What happened to Downtown San Diego? Over the past six months, Downtown has undergone an incredibly swift evolution. Starting as the “cost-effective” alternative, rents are quickly rising, though still not on par with the soaring rates of the suburbs. Today, Downtown is unequivocally the “It” place to be for companies focused on talent recruitment, employee retention, and being part of a thriving, energetic community. As a result, companies setting up shop downtown have gobbled up nearly all the Class A office space on the market.

 

Rest assured, this movement is not just in the tech arena. Kleinfelder, an international architecture and engineering firm, moved its team from Governor Park into a 40,000+ square foot space on 550 West C Street several months ago. Berkshire Hathaway has its eyes set on downtown too, moving out of 20,000+ square feet in Mission Valley into 30,000 sf at 525 B Street. AECOM has moved its team from 1420 Kettner and Governor Park into a 40,000+ square foot space in 401 West A Street. Bumble Bee Foods moved its global headquarters from Kearny Mesa to the Showley Brothers’ Candy Factory for 30,000+ square feet on the outfield of Petco Park.

 

So what gives? Why the movement to and buzz about Downtown?

 

1) It’s still the most cost-effective alternative compared to other Class A and B space across the county.

 

2) Amenities, amenities, amenities. Downtown is the only true live-work-play environment in the county. It’s one of the most walkable large cities in the U.S. and has more restaurants than Sorrento Valley, UTC, and Del Mar Heights has combined!

 

3) It’s where the talent lives. Little Italy, San Diego, was just named the Millennial Capital of the U.S. and it is the most desirable place for young talent to live-work-play. When competing with the Googles and Twitters of the world, talent recruitment and retention is one of the most challenging aspects of running a successful company in San Diego. The best way to keep them happy is to make sure they love where they work.

 

The only issue with relocating to downtown? There is currently no new commercial construction underway. Downtown is one of the few markets to have zero commercial high-rises constructed in the last economic downturn. However, that’s not to say we won’t be seeing some of the city’s best high-rises pop up in the next 5 years.

 

DISCLAIMER: This blog has been curated from an alternate source and is designed for informational purposes to highlight the commercial real estate market. It solely represents the opinion of the specific blogger and does not necessarily represent the opinion of Pacific Coast Commercial. www.PacificCoastCommercial.com

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