San Diego has a growing business community, with plentiful office space for rent within the 324.3-square mile city boundaries. Major industries in San Diego include life sciences, information and communications technologies, the military and support services, and tourism. As San Diego “has become the human genome research capital in America,” according to former President Bill Clinton (CNBC’s “Closing Bell” program, June 5, 2012), firms in research and biotech increasingly come to the city seeking commercial space for rent. With tech employment in San Diego increasing by 15.7%, and STEM (science, engineering, technology, and math) industries growing 6.5% between 2010 and 2012 the city has a growing technology base. New technology, software, and information firms are joining QUALCOMM, Teradata, ESET North America, and others companies that have chosen to lease in San Diego. Rental space is available for defense contractors and other military support services, as San Diego is both a Navy and a Marine town.
The year 2013 showed strong growth for San Diego across most industries, with 23.200 jobs added (1.8% growth in employment) between December 2012 and December 2013. Jobs are expected to increase through 2014 as well, with leasing activity remaining strong, vacancy rates decreasing, and lease rates increasing. Life sciences and biotech have a long tradition of locating in San Diego, which has more than 600 life science companies and over 80 research institutes. Software also has a tremendous impact on the local economy, with an estimated economic impact of $9.8 billion annually. Maritime industries (including defense contractors and other military support, as well as maritime science) contribute over $14 billion in revenue to the San Diego economy. Finally, with its pristine beaches and other tourist attractions, tourism rakes in economy-boosting revenue from the more than 30 million visitors that come to San Diego annually.
Just 20 miles from the Mexican border, San Diego has an international flavor, showcasing a blend of Mexican and American culture; it is also home to many other cultures and nationalities. Rolling hills and popular beaches define the city’s terrain, and create a perfect setting for the place that has been called the “sports and fitness capital of the world.” Balboa Park is San Diego’s urban oasis, with 1,200 acres of gardens, fifteen museums, several performing arts centers, restaurants, and the World-Famous San Diego Zoo. Other sites of interest include the San Diego Zoo Safari Park and LEGOLAND, historic districts like Old Town and Presidio Park, the city’s restored Victorian downtown Gaslamp Quarter, and three historic ships that are permanently moored on the San Diego Bay. A trolley system links residents to tourist locations, sports venues, the downtown area, and the Mexican border. San Diego is also known for fitness and exercise, and has plenty of opportunities for keeping fit via numerous water sports, perfect weather for outdoor exercise, and many fitness centers.
Juan Rodriguez Cabrillo, the Portuguese explorer and European discoverer of California, brought his ship into San Diego Bay in 1542 and claimed the area for Spain. The first European settlers were Franciscan fathers who built a settlement adjacent to the original settlers, a Kumeyaay Native American community. San Diego briefly became the capital of Mexican California after Mexico gained independence from Spain, but was shortly thereafter annexed to the United States at the end of the Mexican War in 1846. The population of the little town fluctuated with gold strikes, rail lines, and the Panama-California Exposition of 1915, but it wasn’t until the bombing of Pearl Harbor that San Diego got a chance to flourish. The United States military found San Diego to be the perfect location for a Navy base, and an influx of defense support industries led to tremendous growth. Today, the city considers its Marine and Navy roots to be a major part of its identity, as it is home to the largest concentration of military in the world.
San Diego has 1,338,348 residents. The county’s population is 3,211,252 as of 2013, but unlike many metropolitan areas, San Diego has managed to preserve the identity of its small communities, whether through urban planning or due to geographical boundaries created by canyons and mesas. The border between San Diego and Tijuana is the busiest in the world, and creates partnership and collaboration between cultures. The ethnic makeup of the city reflects this close connection to the portal of the Hispanic world, with City-Data.com reporting 42.6% of the population as White alone, 30.5% Hispanic, 16.9% Asian, 6.2% Black alone, and other races/ethnicities making up the remaining 3.8%. With a per capita income of $31,950, the city barely edges out the national household income of $27,319 (both 2012 numbers).
Asking rents are increasing in San Diego and vacancies are decreasing. This trend is attracting the attention of venture capital firms, and San Diego was recently ranked in the top five metro areas for high-tech office investors by CBRE Brokerage (“San Diego Number 5 for Office Investors,” San Diego Union-Tribune, August 20, 2014). The city continues to attract firms from this industry seeking lower rents than in San Francisco and New York, which are looking to lease in an expanding market. In 2013, eleven biotech firms filed for IPOs, an indication of strength in the life sciences market as well.
Conforming to San Diego’s culture of small communities within city limits, there are numerous locations in which to find commercial leases. Downtown San Diego is the center of high-rise commercial real estate. Mira Mesa/Sorrento Valley is a hot spot for biotech and information tech/software. Other strong markets include La Jolla, Rancho Bernardo, and Kearny Mesa, all unincorporated communities within city limits; and many others in incorporated areas of the San Diego Metropolitan Area.