Market Overview

The North County San Diego industrial market is largely decentralized and comprised of five cities, including Carlsbad, Escondido, Oceanside, San Marcos, and Vista. Situated 35 miles north of downtown San Diego and 52 miles south of John Wayne Airport in Orange County, the coastal location is a major factor in the area’s appeal to corporate users and its 885,084 residents.

Behind the Numbers

> At the close of Q2 2018, combined industrial/R&D vacancy stood at 5.6%. This is a 37 basis point increase from the prior quarter (5.3% in Q1 2018). Direct vacancy made up 5.2% of the inventory while sublease vacancy stood at 0.5%. All five North County submarkets maintain vacancy rates below 9.0%.
> North County combined industrial/R&D net absorption was a positive 21,139 SF in Q2 2018. Industrial buildings (manufacturing, warehouse, distribution and multi-tenant/incubator uses) posted positive net absorption of 1,763 SF; R&D buildings (flex, wet lab and R&D uses) posted positive net absorption of 19,376 SF. Carlsbad (+71,516 SF) ranked first in net absorption for North County and second countywide behind Torrey Pines (+175,912 SF).
> Average asking rental rates for all product types combined in North County was $0.93/SF on a triple net basis (NNN) compared to $0.90/SF last quarter.
> 236,555 SF of new construction was completed in Q2 2018. The largest building completed was vec∙tor, a 172,655 SF spec building completed by RAF Pacifica Group at 2882 Whiptail Loop in Carlsbad that is fully available. Also in Carlsbad, a 63,900 SF spec building was completed at 2820 Loker Avenue E by Techbilt.
> There was 1,684,258 SF under construction in North County as of Q2 2018. Some significant projects to highlight include Ryan Companies’ 410,903 SF Pacific Vista Commerce Center in Carlsbad, McDonald/Black Creek’s 277,793 SF Pacific Coast Collection in Oceanside and RAF Pacifica’s 222,028 SF pro∙duc∙tion four building development in San Marcos.