DOWNTOWN (KGTV) — San Diego's downtown office market continues to struggle with high vacancy rates, but experts say signs of a slow recovery are beginning to emerge.
A report by commercial real estate group JLL shows San Diego's overall office vacancy rate sits at 13.9%. Downtown has the highest vacancies in the region, at about 25%.
Richard Gonor, managing director at JLL, said the shift to remote work and company downsizing pushed vacancies higher across the region.
"Since the pandemic, there's been a consolidation of companies and a rethinking of how people structurally work," Gonor said.
Downtown San Diego is the largest office market in the region, with 12 million square feet of space.
"Downtown is the largest office market with 12 million square feet, and at about 25% vacancy, that means we've got about 3 million square feet of inventory that's waiting for new companies to fill," Gonor said.
Despite the challenges, Gonor said interest in downtown is beginning to return, with more companies looking for space there to attract employees.
"There's some great opportunities downtown today, and we're starting to see a resurgence in interest in downtown," Gonor said.
Landscape architect David McCullough said the changes on the ground are already noticeable.
"If you're in downtown about a year ago, it was a completely different downtown than what you'll see today. You'll see a lot more vibrance, a lot more activity," McCullough said.
McCullough said a cleaner, safer, and more active downtown will be key to revitalizing the area, but a full recovery could still take years.
"I think 2027 is going to be remarkably different, and then it's going to be a slow increase from there," McCullough said.
JLL's latest report shows leasing activity remains below historical averages, but conditions are beginning to stabilize.
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