— By Jerry Holdner, Avison Young — Southern California Region Lead, Innovation & Insight, AVANT — The San Diego office market is starting to show signs of weakness. Unemployment remains low, but it is important to highlight that job creation has been uneven. The bright spot is that high-value-added jobs in a broad range of sectors, such as scientific research, medical products and pharmaceutical development continue to grow, which bodes well for San Diego. We are still uncertain about a recession. It could be short and shallow like many are predicting, or we could be in for a period of monumental headwinds. Investment sales have retreated as interest rates increased, and office workers have been reluctant to return to the office. This has created an uncertain picture of our office market going forward. The rise and future uncertainty of the pace of inflation has caused many to take a “pencils down” approach. This has caused many to slow, pause or even halt their dealmaking, growth, capital investment and development efforts as the ability to borrow funds has become difficult. San Diego’s office vacancy currently stands at 12.3 percent, and 18.9 percent of the total office market is available (including sublease …
