Market Trends
- The market’s vacancy rate ended Q2 2026 at 8.6%, declining year over year. Although vacancy remained elevated, slowed construction and positive net absorption are beginning to stabilize market fundamentals.
- The largest project underway is a 612,240-square-foot (sf), four-building speculative development at Otay Mesa Business Park. Construction activity exceeded 1.0 million square feet (msf) for the first time in three quarters.
- Elevated vacancy and leasing activity driven by new occupancies should keep concessions generous while asking rents remain relatively flat. Tenant-favorable conditions are expected to persist in the near term.