The Trends: San Diego Capital Markets series tracks property sales activity for the San Diego region and cap rate data from the CBRE North American Cap Rate Survey. The report includes local cap rates and sales by buyer and product type. This issue includes data for the first half of 2018 (H1 2018), updated last on September 2018.


  • After the highest volume half in more than 10 years, total sales volume slowed significantly in H1 2018. Total sales were 46.1% lower than the previous half and 26.4% lower than the five-year average. Although sales were off in the first half of 2018, the volume should improve as several listings are expected to close in the second half 2018. 
  • Despite the slowing transaction volume, deals continued to demand a high price tag. Across all product types, price per sq. ft. or unit were up compared to the five-year average. Office deals posting the second highest price per sq. ft. in more than 10 years due to the appetite for Class A product. With the exception of retail, cap rates remain low or are falling, especially for value add opportunities in the market. 
  • Looking ahead, investor demand is expected to remain strong across all product types with respects to value-add and core assets. Market fundamentals are supported by strong regional economic drivers. Vacancy rates remain low, new product is limited and rents are expected to remain steady or rise. Industrial and multi-family should be attractive investments for buyers looking to hold longer term for steady cash-flow.