Apple Leases a Combined 165,622 SQFT in San Diego’s UTC Submarket

Apple, San Diego, University Town Center, La Jolla Reserve, The Irvine Company, American Assets Trust, La Jolla Commons, Culver City, Kidder Mathews, DermTech, Tandem Diabetes Care, Inc., Kilroy Realty

By Catherine Sweeney

Apple is continuing to take up space in Southern California. In the third quarter of 2021, the company signed two large-scale leases in San Diego totaling 165,622 square feet. Details about the transaction were made available in a third quarter office market report from Kidder Mathews. 

In the first transaction, which was signed in August, Apple leased 92,446 square feet at La Jolla Reserve in San Diego’s University Town Center submarket. Located at 4401, 4435 and 4445 Eastgate Mall, the office campus is owned by The Irvine Company and features 300,000 square feet of rentable space. 

Also in the University Town Center neighborhood, Apple leased 73,176 square feet of space from American Assets Trust at its La Jolla Commons property. The 13-story office building is located at 4707 & 4747 Executive Drive and offers approximately 724,186 square feet of space. 

Apple has been diligent about expanding its space throughout Southern California. More recently, the company announced plans to expand its San Diego team to more than 5,000 employees by 2026, a 500 percent increase from its 2018 goal. In Culver City, the company also is looking to grow its team by 3,000 employees during the same time. 

The growth is part of larger plans Apple made to invest in its U.S. properties. The company recently made plans to invest more than $430 billion and add 20,000 jobs across the country over the next five years. Currently, Apple employs more than 2.7 million across the U.S. According to the company, Apple is the largest taxpayer in the U.S. and has paid almost $45 billion in domestic corporate income taxes over the past five years.

However, Apple is not the only company showing interest in San Diego. According to the report from Kidder Mathews, leasing activity in the region’s office market reached nearly two million square feet in the third quarter of 2021, marking a new record high since before the COVID-19 pandemic. Currently, lease transactions in the third quarter total approximately 1.97 million square feet, compared to 965,334 square feet the year prior. At the same time, rental rates have increased nearly four percent year-over-year. In the third quarter of 2021, Kidder Mathews reported rental rates of $2.99 per square foot, while in the third quarter of 2020, they were at approximately $2.89 per square foot. 

This is in large part due to the tech and pharmaceutical industries throughout the region. In addition to Apple, other major leasing transactions in San Diego’s office market include Tandem Diabetes Care, Inc. occupying 181,175 square feet at San Diego Corporate Center and DermTech leasing 95,997 square feet at the Del Mar Corporate Center. Both buildings are owned by Kilroy Realty and located in the Del Mar Heights submarket of San Diego.