Leasing activity turns positive in the third quarter

After three consecutive quarters of declining lease activity, the San Diego office market saw a rebound in leasing activity. Leasing activity increased by 5.5% from the previous quarter to 951,361 square feet (sf), though this reflects a 23.8% decrease year over year. While leasing activity improved this quarter, tenants remain focused on reassessing and adjusting their evolving space strategies.
San Diego’s office leasing activity continues to be impacted by the downturn in the technology and healthcare sectors, as office-using employment fell by 3.5% in the third quarter. Notably, both UC San Diego Health and Dexcom recently announced layoffs due to financial challenges. The unemployment rate was 5.0% as of August 2025, an increase from 4.8% one year ago.

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