General Atomics Caps Powerful Year for SD Industrial Market
One of San Diego's largest corporate citizens is adding to its real estate presence here. General Atomics Aeronautical Systems has inked a deal for 112k SF at 13550 Stowe Dr, a flex office/industrial building that has an R&D component. The new requirement will allow General Atomics a parts distribution hub, says Kidder Mathews' Mickey Morera, who brokered the direct deal.
General Atomics is the latest industrial deal to cap what has been a historic year for the market in San Diego, especially for R&D space. San Diego County industrial/R&D net absorption of nearly 445k SF in Q3 2015 contributed to what could be the "hottest year of industrial demand in 15 years,” according to a Colliers International Q3 industrial market report. Vacancy rates for both industrial and R&D space was 5.2%, the lowest level seen in SD in 18 years, matched only by 1997's sub 5% rate. Biggest leases this past quarter include FedEx's 300k SF build-to-suit at 1402 Avenida Del Oro and Suja Juice's 172k SF lease off Ocean Ranch Boulevard, both in Oceanside, as well as Soitec Solar's sale-leaseback at 16550 Via Esprillo (here) in Rancho Bernardo.
Of course, all this activity means the developers come out to play. Colliers notes that more than 1M SF of industrial space is underway, with most of that being spec, including more than 600k SF of R&D space in Central County. This includes Techbilt's 46k SF Poway Corporate Center that the firm leased to Best Buy, and its Grace Digital 25k SF facility at Poway Corporate Center. First Industrial Realty Trust also is completing the three-building, 237k SF First Park @ Ocean Ranch campus. “There's plenty of activity, but the market's really tight. Tenants are having a hard time finding space,” says Mickey (here). “I think developers were a little slow to the dance, and so now they're coming out of the ground.”