CHULA VISTA INDUSTRIAL SPACE HITS NEW DEVELOPMENTS
The Chula Vista industrial leasing market presents an interesting dynamic. Brand-new developments are arriving, offering modern spaces for lease in Chula Vista, yet overall vacancy is ticking upwards. This prime location is the second largest city in San Diego and provides undeniable advantages with its freeway network. Interstates 5 and 805, along with State Routes 54 and 125, ensure seamless transportation across the region and to the vital Mexico border. Furthermore, its industrial core in bustling South County puts businesses at the center of a significant labor pool, both local and cross-border. This makes Chula Vista properties for lease an attractive option.
RECENT SPACE COMPLETIONS
The Rockefeller Group wrapped up their Heritage Industrial Center in 2023, adding a 200,000 square feet of industrial space for lease just east of I-805. These three buildings offer high ceilings of 28 to 32 feet, and Daikin snagged the first lease in Chula Vista there in 2024. Not far away, Sudberry also completed two buildings at Otay River Business Park in 2024, totaling over 200,000 square feet between I-5 and I-805. These also feature those desirable 32-foot clear heights. PGW Auto Glass jumped on the first available commercial property for lease in Q3 2024, grabbing nearly 24,000 square feet for their first South County spot.
Right now, about three-quarters of the available space in these new parks is up for lease. This is just in the first quarter. After these recent completions, new construction has slowed down. So Chula Vista isn’t facing a ton of new supply pressure at the moment.
VACANY HITS ALL HIGH
We did see vacancy tick up in 2024, rising by 200 basis points year-over-year and hovering around 10.7% in the first quarter. In fact, Vacancy hit a ten-year high at the end of last year. It’ll likely stay above 10% until the market absorbs the new spaces and clears out large vacancies like the old Amazon warehouse at Eastlake and United Technologies’ former 200,000-SF site.
RENTS DIPS, DEALS OPEN UP
Chula Vista industrial Rent growth has been a bit more modest, at 2.4% year-over-year, compared to the five-year average of 7.1%. You might even see tenants getting a free month on a five-year lease. There’s definitely more room for negotiation on new spaces. For example, asking rents at Heritage Industrial Center have come down to $1.52/SF. Daikan locked in a seven-year, 26,000-SF deal there in 2024 with a starting rent around $1.50/SF.
Chula Vista’s Future
Keep an eye on Chula Vista – things could be picking up. There’s a good chance we’ll see more smaller businesses from Central County making the move down south. Actually, tenants are on the hunt for more affordable industrial rent spaces. This potential influx of new tenants looking for better value could inject some fresh energy. It may also help fill up some of that available space in the Chula Vista market. So, while we’re seeing some shifts right now, the future could hold some interesting opportunities as businesses seek cost-effective locations. It’s an interesting time in the Chula Vista industrial scene. With new spaces available and potential demand on the horizon, it’s definitely a market to watch. If you’re looking for opportunity in South County, now could be the moment.
With vacancy rising and fewer new builds, landlords are more flexible — tenants now have more negotiating power than we’ve seen in years.
High-demand industrial properties in Chula Vista are moving fast. If you’re considering relocation or expansion, now’s the time to act. Seeking to lease warehouse or industrial space in Chula Vista or other submarkets explore available industrial spaces ready for lease?
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