Josh Oll, senior director of market analytics for CoStar Group in San Diego, presented a regional commercial real estate overview to the City Council, saying trends vary by sector and that several persistent patterns are reshaping market activity.

Oll said office leasing activity has slowed and that average lease sizes are smaller than before the pandemic: “leasing velocity is down. We're averaging about 15% to 20% fewer just leases that are being transacted on a quarterly basis,” and average lease sizes are roughly 15%–20% lower. He said many office users are seeking to reduce footprint and that buildings with high vacancy — especially large buildings with more than 25% vacancy — will be especially challenging to reoccupy.

On retail, Oll said availability rose about 80 basis points countywide in 2025 and by roughly 100 basis points in Carlsbad, but that availability remains historically low (around 4–5%): “We have been coming off probably the strongest retail market that we have had in 20 years.” He said retailers are quick to occupy newly available space because Carlsbad has relatively little new construction.

On industrial property, Oll said tariffs are weighing on demand and values: “Values are probably down in the neighborhood of 25% or so on industrial properties as a whole.” He added that small-bay industrial space remains active but that vacancy and time-to-lease have lengthened in some submarkets.

On multifamily, Oll described an atypical recent cycle in which very strong rent growth following the pandemic has given way to near-zero year-over-year rent growth in 2025; he said landlords increasingly use concessions to maintain occupancy.

During Q&A, council members asked about large vacant Rite Aid buildings. Oll said freestanding former Rite Aid sites (12,000–16,000 square feet) may need resizing, rezoning or conversion to other uses and could take longer to retenant than inline drugstore locations.

Oll did not propose city action but characterized the market shifts as factors the council and staff should consider when planning economic development and land-use strategy.