Quote:
Originally Posted by SDfan
Our industries and geography aren't conducive to downtown high-rise office development. Defense is based, well, on base or contracted in industrial zones. Tourism/hospitality doesn't have much use for office outside of corporate headquarters, which we have few because of our limited air, land, and sea connections. Tech/Biotech/Telecom is all clustered north of downtown in pseudo-suburban office markets. Healthcare sticks to hospitals, which none are downtown.
Basically, our downtown office space is for government, banks and finance, legal and accounting firms, and random other small to maybe medium businesses which aren't growing. If anything, most of those industries are being disrupted by tech and are consolidating. Unless downtown starts attracting sizable tech companies, we won't see much growth (UCSD's expansion may help with that, but Qualcomm looks like it's about to disappear so...).
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I agree with 90% of what you said. The exception would be air connections and overlooking the business climate of CA.
San Diego International is extremely well connected domestically and increasingly so internationally over the past couple of years. From SAN you can get to Japan, UK, Germany, Switzerland, Canada, Mexico, and China (via TIJ). Having as many flights as LAX would be a benefit, but I don't think this is anywhere near the top of the list as to why office construction is slow in DTSD.
Agree that key industries such as biotech tend to favor office & lab space in suburban campuses as opposed to high rises. Same for defense industries. Hotel/tourism businesses don't use much office space, most of their real estate space is the hotels themselves.
Here are the major factors which I believe is impacting office space in San Diego (#3 and 4 apply to many other cities as well)...
1. Businesses don't want to headquarter in California
2. Many businesses would prefer to headquarter in LA as opposed to SD since the costs are comparable.
3. Most highrise space (particularly outside NYC) was/is built for banks/finance and very large corporations. Regarding corporate headquarters, see #1, #2. Key industries such as biotech tend to favor office & lab space in suburban campuses as opposed to high rises. Same for defense industries.
4. Telecommuting has impacted the office market in many cities. A good portion of my company's workforce is outside of the office. Many cities are not seeing much office development, and many are seeing office buildings re purposed as residential.
In a nutshell, many business (including banks and corporate HQ) have consolidated and have chosen their HQ locations carefully. Headquartering in San Diego/California is a nonstarter for most considering the business climate. LA and SF aren't seeing many businesses relocate there with the exception of companies that need to be there for strategic reasons (be closer to the epicenter of tech, hollywood, etc).