San Diego Commercial Office Space for Rent

Q3 2026

Q3 2026 San Diego Commercial Real Estate Market Report

Focus: Q3 2026 Market Trends

Executive Summary

San Diego's commercial real estate market remains balanced, with retail vacancy at 4.4%, industrial absorption positive year to date, and office vacancy steady at 13.4%. Tenant demand on TenantBase shifted toward office in Q3: office space accounted for 50.0% of all San Diego tenant searches, nearly four times its 13.0% share in Q2, overtaking retail for the first time in 2026.

Sector Snapshot

  • Office: Steady. Vacancy held at 13.4% in Q2, with Torrey Pines at just 3.1% and Downtown at 33.3%.
  • Industrial: Balanced. Total vacancy was 7.4% with positive year-to-date absorption.
  • Retail: Tight. Vacancy was 4.4% in Q3, highlighted by the sale of Plaza Bonita in Chula Vista.
  • Multifamily: Stable. Vacancy was 5.4% in Q1 as the development pipeline contracted.

San Diego Tenant Demand Index

The TenantBase Tenant Demand Index tracks what businesses across San Diego County are actively searching for on the TenantBase platform each quarter. Because it measures tenant intent before leases are signed, it shows where demand is heading ahead of traditional vacancy and absorption data.

Q3 2026 Search Share by Space Type (July 1 to September 30, 2026)

  • Office: 50.0%
  • Retail/Storefront: 46.2%
  • Warehouse/Industrial: 3.8%

Three-Quarter Trend

  • Office: 16.1% in Q1, 13.0% in Q2, 50.0% in Q3
  • Retail/Storefront: 53.7% in Q1, 55.9% in Q2, 46.2% in Q3
  • Warehouse/Industrial: 30.2% in Q1, 32.7% in Q2, 3.8% in Q3

Key Takeaways

  • Office overtook retail as San Diego's top search category in Q3, after retail led with more than half of searches in Q1 and Q2.
  • Longer office commitments are rising. Office searches for 3 to 5 year terms grew from 16.7% in Q2 to 23.1% in Q3.
  • Retail demand is split between short and long terms. Retail searches for terms under one year and for 5+ years each reached 30.6% in Q3.
  • South County leads location interest. Chula Vista was the most requested area, often paired with Otay Mesa.

Office Market

San Diego office held steady in Q2 2026, the most recent quarter with published countywide office data, with sharp differences between submarkets.

Key Metrics (Q2 2026)

  • Vacancy: 13.4%, flat quarter over quarter (Kidder Mathews)
  • Availability: 16.3% (Kidder Mathews)
  • Average asking rent: $3.15/SF per month full service, up 1.6% year over year (Kidder Mathews)
  • Submarkets: Torrey Pines at 3.1% vacancy and Downtown at 33.3% (Kidder Mathews)
  • By class: Class A at 17.3% vacancy versus Class C at 7.4% (Kidder Mathews)
  • Under construction: 466,592 SF at 10210 Campus Point Dr in UTC, due 1Q 2028 (Kidder Mathews)

TenantBase Office Activity

Demand share: 50.0% of San Diego tenant searches, up from 13.0% in Q2 and 16.1% in Q1.

Lease term preferences:

  • Less than one year: 48.1%
  • 2 to 3 years: 26.9%
  • 3 to 5 years: 23.1%
  • 5+ years: 1.9%

Space requirements by term:

  • Less than one year: 1,000 to 2,300 SF
  • 3 to 5 years: 3,000 to 6,250 SF

Top locations: Chula Vista was the most requested area across all space types in Q3, both on its own and paired with Otay Mesa, followed by Downtown San Diego, El Cajon/East County, Mission Valley, and Oceanside.

TenantBase data vs. the market: San Diego office demand on TenantBase is centered on small and mid-size users, with short-term searchers needing 1,000 to 2,300 SF and 3 to 5 year searchers needing 3,000 to 6,250 SF. Downtown, at 33.3% vacancy, offers the most leverage, while Torrey Pines, at 3.1%, remains tight. Tenants committing to 3 to 5 years are best positioned to negotiate concessions on Class A space, where vacancy is 17.3%.

Industrial & Warehouse Market

Key Metrics (Q2 2026)

  • Total vacancy: 7.4%, with direct vacancy at 6.6% (Kidder Mathews)
  • Year-to-date net absorption: positive 570,700 SF (Kidder Mathews)
  • Average asking rent: $1.47/SF per month NNN (Kidder Mathews)
  • Otay Mesa: 10.7% direct vacancy at $1.04/SF, with 746,173 SF under construction (Kidder Mathews)
  • Notable leases: Amazon, 222,293 SF in El Cajon, and Waymo, 105,550 SF in Chula Vista (Kidder Mathews)

TenantBase Industrial Activity

Demand share: 3.8% of San Diego tenant searches, down from 32.7% in Q2 and 30.2% in Q1. Industrial tenants searching in Q3 averaged 2,500 to 10,000 SF on 1 to 2 year terms.

TenantBase data vs. the market: With Otay Mesa vacancy above 10% and new supply delivering there, small industrial users have the most options in South County.

Retail Market

Key Metrics (Q3 2026)

  • Vacancy: 4.4%, flat year over year (Kidder Mathews)
  • Average asking rent: $2.37/SF per month, up 1.43% year over year (Kidder Mathews)
  • Largest sale: Plaza Bonita in Chula Vista, 594,150 SF, for about $196.9 million (Kidder Mathews)
  • Notable lease: Trader Joe's, 8,630 SF in San Marcos (Kidder Mathews)

TenantBase Retail Activity

Demand share: 46.2% of San Diego tenant searches, down from 55.9% in Q2 and 53.7% in Q1.

Lease term preferences:

  • Less than one year: 30.6%
  • 5+ years: 30.6%
  • 2 to 3 years: 20.4%
  • 3 to 5 years: 14.3%
  • 1 to 2 years: 4.1%

Space requirements by term:

  • Less than one year: 500 to 1,000 SF
  • 2 to 3 years: 1,750 to 3,750 SF
  • 3 to 5 years: 750 to 1,750 SF
  • 5+ years: 2,400 to 5,000 SF

TenantBase data vs. the market: San Diego retail demand on TenantBase is concentrated in Chula Vista and South County, the same area that drew the quarter's biggest retail investment with the Plaza Bonita and Terra Nova Plaza sales. With countywide vacancy at 4.4%, tenants seeking 5+ year terms and 2,400 SF or more should start early, while short-term tenants needing under 1,000 SF will find more flexibility.

Multifamily Market

San Diego apartment vacancy was 5.4% in Q1 2026 as the development pipeline contracted, according to Kidder Mathews data reported by The Registry.

Q4 2026 Outlook

  • Office: Expect stable vacancy overall, with rising tenant search demand supporting small-suite leasing outside Downtown.
  • Industrial: Expect balanced conditions, with new Otay Mesa supply giving tenants more options.
  • Retail: Expect vacancy to stay near 4.4% as investors and retailers focus on South County.
  • Multifamily: Expect gradual tightening as the pipeline shrinks.

Frequently Asked Questions

What type of commercial space are San Diego tenants searching for in 2026?

In Q3 2026, office space made up 50.0% of San Diego tenant searches on TenantBase, followed by retail/storefront at 46.2% and warehouse/industrial at 3.8%. Office share rose from 13.0% in Q2.

Which San Diego areas are tenants searching most?

Chula Vista was the most requested area on TenantBase in Q3 2026, followed by Downtown San Diego, El Cajon/East County, Mission Valley, and Oceanside.

What lease terms do San Diego office tenants want?

48.1% of San Diego office tenants on TenantBase sought terms under one year in Q3 2026, 26.9% sought 2 to 3 years, and 23.1% sought 3 to 5 years.

What is the office vacancy rate in San Diego?

San Diego office vacancy was 13.4% in Q2 2026, with an average asking rent of $3.15/SF per month full service, according to Kidder Mathews.

What is the retail vacancy rate in San Diego?

San Diego retail vacancy was 4.4% in Q3 2026, with asking rents of $2.37/SF per month, according to Kidder Mathews.

How can I find commercial space in San Diego at no cost?

TenantBase matches business tenants with vetted independent tenant rep brokers across San Diego County at no cost to the tenant. Brokers are compensated by the landlord. Get started with TenantBase.

Sources

  1. TenantBase proprietary search data, San Diego, July 1 to September 30, 2026
  2. TenantBase, San Diego Commercial Real Estate Market Report, Q2 2026
  3. TenantBase, San Diego Commercial Real Estate Market Report, Q1 2026
  4. Kidder Mathews, San Diego Office Market Report, Q2 2026
  5. Kidder Mathews, San Diego Industrial Market Report, Q2 2026
  6. Kidder Mathews, San Diego Retail Market Report, Q3 2026
  7. The Registry, San Diego Multifamily Vacancy Rises to 5.4% as Development Pipeline Contracts in Q1 2026 (April 27, 2026)

Disclaimer

Information in this report is aggregated from third-party sources and TenantBase proprietary platform data, and was synthesized with the assistance of AI. Market metrics reflect the most recent published data available at the time of writing. TenantBase search data reflects tenant activity on the TenantBase platform and is not a measure of total market leasing. All figures should be independently verified before making real estate decisions.