Solid Demand for Business Space Forecast

Times Staff Writer

Anti-growth sentiment, sewage treatment problems and increased traffic along the Interstate 15 corridor eventually will hamper San Diego County's growth patterns, but new office, industrial, retail and residential space will continue to be absorbed at a healthy pace during 1987, according to results of Grubb & Ellis' annual real estate survey.

The survey, released on Monday, predicts that:

- Rental concessions for new office space will disappear because occupancy rates in the county are climbing toward 90%--the highest in six years--and new construction is slowing considerably.

Three downtown high-rises will add 1.2 million square feet of office space in coming years, but the occupancy rate there will top the 85% rate achieved in 1986--downtown's highest since 1981.

The area around University Towne Centre, identified by Grubb & Ellis as San Diego County's second most active marketplace, absorbed 500,000 square feet of office space during 1986 and will absorb another 400,000 square feet during 1987.

- The recent rash of store closings probably will continue during 1987, as economic forces push marginal retailers to sell their real estate.

The shopping center market will absorb 2.9 million square feet of proposed new development, maintaining the 95% occupancy rate reached during 1986.

- During 1986, the industrial occupancy rate fell slightly to 90%, but the research and development facility vacancy rate climbed to 67%. The combined rate for industrial and research and development space will climb slightly to 84.4%.

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