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Market Report

San Diego Multifamily Market

2Q 2023

Disparity Between CBD and Suburban
Vacancy Positioned to Widen

Developers exhibit confidence in future downtown demand. Home to one of the nation’s lowest Class A vacancy rates, San Diego appears well-equipped to handle a wave of new units during 2023. The metro’s downtown, however, may experience some volatility. After compressing to the mid-2 percent band in the early part of last year, vacancy in the CBD rose during each of the subsequent four quarters, despite a minimal number of supply additions. This movement placed downtown unit availability above its pre-pandemic benchmark, with the area’s rental stock now slated to grow by nearly 5 percent this year. These supply additions — specifically several large-scale projects in Little Italy and the East Village — will place upward pressure on vacancy and likely increase overall concession usage in the CBD.

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