Western

— By Sebastian Bernt of Avison Young —  The San Diego office market is beginning to stabilize in 2025. However, recovery remains uneven amid elevated vacancy, rising sublease availability and evolving workplace strategies. While quarterly leasing activity has improved modestly— up roughly 7 percent year over year through the second quarter — overall fundamentals remain challenged. San Diego’s total office availability rate stands at 18.2 percent as of the second quarter. This is flat from the previous quarter but still up more than 500 basis points from pre-pandemic norms. Sublease availability exceeds 2.2 million square feet, a lingering effect of corporate downsizing and the continued shift toward hybrid work models. Sublease inventory is most concentrated in suburban nodes such as UTC and Sorrento Mesa, as well as Downtown San Diego. Demand remains strongest for Class A assets in suburban submarkets like UTC, Del Mar Heights and Sorrento Valley where tenants prioritize modern, amenity-rich properties. Even within these markets, average deal sizes have declined by 20 percent to 30 percent compared to 2019 levels, with users often consolidating space and seeking shorter lease terms. Downtown San Diego continues to face pronounced headwinds, with vacancy topping 25 percent in several Class B …