San Diego ranks 19th out of 45 major U.S. markets for the resiliency of its market for offices serving technology companies, according to a new national outlook report by the brokerage firm JLL.
Researchers said technology firms continue to be “first movers” on new office developments in San Diego, meaning the first tenant in a new project is likely to be a tech company due to current demand factors.
The report ranks San Diego at 22nd among major markets for the volume of tech company funding, at $210 million for the period running from the third quarter of 2015 through the second quarter of 2016. The local market generally fares well in categories including access to capital, its high concentration of innovation-related firms, the presence of an existing industry cluster, and access to qualified talent.
A JLL statement said San Diego’s position as a tech hub is lowered somewhat by the fact that the local technology sector lacks a strong centralized core. Currently, Sorrento Mesa, anchored by Qualcomm Inc., is known as the region’s most tech-centric submarket, but tech firms are also spread among submarkets including Downtown San Diego, North County and the Interstate 15 corridor.
San Diego’s average tech office rents compare favorably to those of San Francisco, Silicon Valley and Los Angeles, but local office rates are higher than most other U.S. Western and secondary office markets.
Officials of Chicago-based JLL, which has a significant presence in San Diego County, said the report is intended as a guide to help investors identify office markets that might be most resilient during times of economic contraction.