Leasing activity continues to decline in the San Diego office market

The San Diego office market experienced a decline in leasing activity for the third consecutive quarter, accompanied by a 1.8% drop in office-using employment during the second quarter. Leasing activity fell by 8.2% from the previous quarter to 902,056 square feet (sf), reflecting a 4.3% year over year decrease. While San Diego’s unemployment rate improved slightly from the previous quarter, office leasing activity continues to be impacted by the downturn in the tech and healthcare sectors. Notably, UC San Diego Health and Sharp Healthcare recently announced layoffs due to financial challenges. The unemployment rate stood at 4.0% in May 2025, an increase from 3.6% one year ago.

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