Elliott says San Diego ranked the most desirable city to live in per the results of RETS’ survey of the top 10 western markets, completed in the fall of 2015. “The primary driver for employment in San Diego is the quality of life, followed by the weather and the abundance of space that balances the dense city. From our experience, people that usually move to San Diego stay in San Diego. It’s a tight-knit city with great companies, opportunities and culture. Many companies search for candidates that are locals and know the market well.”
He adds that there is a not a tremendous amount of activity in San Diego, so the number of available mid-to-high-level positions in commercial real estate is lower than in cities like Los Angeles and San Francisco. “When these positions do surface, they’re typically paired with a great opportunity so the hiring company can secure a high-quality candidate.”
There’s a lot to be optimistic about given the solid 2015 that San Diego just experienced, Michael Combs, research manager for CBRE, formerly with the San Diego Regional EDC, recently told GlobeSt.com. “The region added the most jobs in 16 years, led largely by innovation economy jobs. Investment trends were very positive, and a healthy flow of capital is essential to our innovation economy. A recent study by the Martin Prosperity Institute found that San Diego received the sixth most venture capital investment in the world, ahead of global cities like London and Paris. There are a lot of signs that the region isn’t going to slow down significantly in 2016.” Not bad for a market that was once heavily reliant on the defense sector for its income.
For Stacey Pennington, urban planner for Makers Quarter in the East Village area of Downtown San Diego, the market’s rise began with UCSD decades ago, when the city recognized the importance of creating a university presence in La Jolla and worked out a very beneficial deal with the school. “Pueblo land was given to UCSD at a discounted price, and it flourished into its own innovation cluster, becoming an internationally recognized hub for biotech and related industries,” she says. “It’s spurred a lot of clusters throughout the region.”
Today, Pennington says, San Diego is #3 in the US for life sciences and attracts more than 60% of the region’s venture capital. It’s home to over 600 life-science firms and more than 80 research institutes. “That kind of density and cross-fertilization between education, research, innovation and entrepreneurship is tightly intertwined.”
The region is also home to more than 1,200 sports and active-lifestyle companies, particularly in the North County coastal area, which employs more than 20,000 people and generates $2.24 billion in economic impact to the region, says Pennington. It also boasts a huge cleantech presence, is #1 in solar installation nationwide and was highlighted by the National Geographic Channel as a Smart City. And San Diego is #1 in telecommunications in the US, and its cross-border relationship and proximity to R&D hubs in Mexico has caused Downtown San Diego to be the center of a megaregion, rather just than the southern edge of the city of San Diego. “That’s the transition point between the regional story and the story of Makers Quarter, in many ways,” says Pennington.
Indeed, Makers Quarter, a new and developing urban district in the East Village, is a big part of that submarket’s success story. A new development hub for apartments, education, retail and eventually one million square feet of office—all punctuated by a distinct arts and cultural presence—Makers Quarter aims to capture the innovation vibe that exists in other parts of San Diego and create a unique neighborhood to attract talent and companies.
While much of the development and redevelopment in the Downtown San Diego market has been residential, that looks to be changing. Kris Michell, president and CEO of the Downtown San Diego Partnership, recently told GlobeSt.com, “I’m hearing that development is skewing toward commercial. For the first time, we’re having discussions with developers who want to build spec office Downtown, not just build-to-suits. I think over the next few years you’ll see more commercial construction here.”