San Diego office market starts 2023 with a slowdown in leasing activity

In the first quarter 2023, the San Diego office market saw a considerable decrease in leasing activity mainly due to the layoffs in the tech and life science industries, which have been the most affected industries during the current economic slowdown. Leasing activity of 1.0 million square feet (msf) was a 60% decrease from one year ago. Of the top ten leases signed in the first quarter, four were renewals. Macroeconomic concerns such as recession fears, rising interest rates, recent midsized bank failures, a slowdown in hiring and continued use of hybrid workplace practices have all slowed office space demand. This has resulted in a many office tenants downsizing their square footages or subleasing their existing spaces.

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