Daily Business Report-Nov. 3, 2016
A San Diego biotech lab (kusi.com)
CBRE Report: San Diego a Prime Location
For Tech Firms to Expand or Relocate
San Diego offers an affordable real estate market compared to other major tech cities, making it a prime location for tech companies to expand or relocate, according to CBRE’s annual Tech-Thirty list, which analyzes the 30 leading technology markets in the U.S. and Canada in terms of high-tech software/services job growth.
“We continue to see consistent, steady growth in tech-related companies in San Diego, primarily in the UTC, Sorrento Mesa, and Downtown submarkets,” said Andrew Ewald, vice president and tech and media expert for CBRE in San Diego. “This growth encompasses organic growth from local San Diego companies as well as the relocation and expansion of companies from other U.S. markets. A strong millennial labor pool, coupled with moderate office rent growth compared to other major tech cities, provides a strong foundation for continue success of our market.”
Tech-related office leasing accounted for 20 percent of all office leasing in the U.S. in the first half of 2016, up from 18 percnt in 2015, despite an overall slowing in tech job creation.
CBRE’s report showed that the hottest tech submarkets where tech job creation continues to boom — led by East Cambridge, Palo Alto and Santa Monica — are significantly outperforming their overall markets in terms of leasing activity and rent premiums, fueled primarily by the demand for highly-skilled tech talent.
Office Rents in the Tech-Thirty
The CBRE report shows that office rents for the top tech submarket in each of the 30 markets analyzed increased in all but one submarket between Q2 2014 and Q2 2016. The highest rent growth in this period occurred in both established and up-and-coming tech submarkets, illustrating stiff competition among tenants to locate in areas rich in talent such as University City, Oakland/East End Pittsburgh, East Cambridge, Palo Alto and Tempe.
As of the second quarter of 2016 Sorrento Mesa was San Diego’s top tech submarket with an average asking rent of $36.12 per annum, and a vacancy rate of 19.1 percent — which is a 13 percent increase from last year. Sorrento Mesa ranked 20th in the top tech submarkets in terms of office rent growth from Q2 2014 to Q2 2016. Downtown San Diego is catching up to submarkets like Sorrento Mesa; developers are now offering amenities that cater to tech tenants, including creative work environments and more competitive office prices.
San Diego ranked 11th in office rent growth, growing 13.6 percent between Q2 2014 and Q2 2016. At the end of Q2 2016, the average asking rent was $32.71, the vacancy rate remained the same as last year at 12.6 percent, and there was 600,000 sq. ft. of space under construction.
Job Growth in the Tech-Thirty
CBRE also analyzed the Tech-Thirty markets according to high-tech industry job growth. San Francisco topped the rankings for the fifth consecutive year; its high-tech job base has grown 47.0 percent between 2013 and 2015, while average asking rents increased by 22.7 percent from Q2 2014 and Q2 2016.
San Diego’s high-tech sector grew 8 percent from 2013 to 2015, and average asking rates are more affordable than other California markets like Los Angeles ($35.02), San Francisco ($72.71) and Silicon Valley ($55.08). The emerging tech sectors in San Diego are cybersecurity, big data analytics and robotics.
Over the past five years, the software/services industry created 780,000 new jobs at a 7.3 percent growth rate and accounted for nearly 20 percent of major leasing activity. In H1 2016, tighter labor and volatile capital market conditions led to job creation slowing to a 4 percent annual growth rate, which had a slight impact on certain office markets, like Washington, D.C., New York and the San Francisco Bay Area.
Scroll to the bottom to see San Diego statistics
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Convention Center Corporation Hires
Chief Business Development Officer
The San Diego Convention Center Corp. has hired Mohsen Khaleghi, a 30-year veteran of the hospitality industry, to lead its new business development strategy initiative.
Khaleghi joins the agency as the senior vice president/chief business development officer, reporting to President & CEO Clifford “Rip” Rippetoe, effective Monday, Nov. 7.
Khaleghi most recently served as a member of the SDCCC Board of Directors and was chair of the Business Development Ad Hoc Committee. He resigned from his position as board member in October.
Khaleghi worked for Hyatt Hotels and Resorts for over 30 years including general manager positions at both the La Jolla and Mission Bay properties. He also was the hotel manager at the Manchester Grand Hyatt San Diego.Khaleghi received his bachelor’s degree in mechanical engineering from Florida International University.
He was one of the charter board members of the San Diego Marketing District and he served as an executive committee member/treasurer and board member of the San Diego Tourism Authority. In 2005, he was recognized as the San Diego Hotel Person of the Year and in 2010, he was nominated as the General Manager of the Year for Hyatt Hotels & Resorts.
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Coding Boot Camp to Launch
at UC San Diego Extension
UC San Diego Extension’s first coding boot camp, where students train for careers as full-stack web developers in just 24 weeks, will begin this winter at Extension’s University City Center campus.
The Coding Boot Camp is an intensive, part-time program structured around the schedules of working professionals and full-time students. Two three-hour evening classes will be held during the week with a four-hour class set for each Saturday. The program will run from Jan. 24, 2017 through July 8, 2017.
“UC San Diego Extension is excited to bring this program to the San Diego market,” said Svetislav Maric, director of technology at UC San Diego Extension. “There is virtually no area of our lives that hasn’t been affected by the internet and because of this, the need for technology expertise will only continue to grow.”
The U.S. Bureau of Labor Statistics ranks web development among the world’s fastest-growing professions, with the job market on track to expand at a 20 percent annual pace through 2022.
In addition to discussion and collaboration in the classroom, students will also work on outside projects with participating area businesses. These projects will be part of their professional project portfolio and will serve as a powerful tool in helping participants land a job after the course.
While previous training or experience isn’t required, applicants should have some knowledge of coding basics.
For more information, click here
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Luna Grill Secures $30 Million
In Financing to Spur Expansion
Luna Grill has secured nearly $30 million in financing from CapitalSpring, a private investment firm focused solely on the branded restaurant sector. Luna Grill will be using the proceeds from the investment to further advance its growth strategy, expanding from nearly 30 units since its founding in 2004, with another 18 locations already in the pipeline for 2017.
Coupled with the investment by CapitalSpring is the company’s relocation to its new 10,500-square foot corporate headquarters in Carmel Mountain Ranch, more than double the size of its previous location.
Nearly 40 employees will be housed at the new offices at 13520 Evening Creek Drive North, Suite 400-A, San Diego, supporting approximately 700 employees in the field at restaurants in San Diego, Orange, Riverside and Los Angeles Counties, along with the Dallas/Fort Worth metro area.
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Electronic Cigarette Sellers to Face
Retailer License Requirement
Starting on Jan. 1, 2017, sellers of electronic cigarettes, vaping devices and other related products will be required to obtain a Cigarette and Tobacco Products Retailer’s License from the California State Board of Equalization, the agency announced. The license must be obtained before the products can be sold to consumers. It will cost $265 for a 12-month period, and must be renewed annually at this cost.
According to Senate Bil x2_5, products requiring licensing will now include: any product containing, made, or derived from nicotine; any electronic smoking or vaping device that delivers nicotine or other vaporized liquids to the person inhaling from the device; and any component, part, or accessory, even if it’s sold separately.
Sellers of electronic cigarettes, vaping devices and other related products should also have a California Seller’s Permit.
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USS Carl Vinson Tests Missile
Defenses off California Coast
Crew members aboard the aircraft carrier USS Carl Vinson on Wednesday fired two Rolling Airframe Missiles and tested a Phalanx rapid-fire gun in live-fire training to shoot down incoming cruise missiles.
The RIM-116 missiles have range of six miles and can reach twice the speed of sound. The Phalanx, a radar-guided gun that can fire 75 rounds a second, is used as a final means of defense.
The San Diego-based Carl Vinson fired at two drones using the ship’s aft missile launcher and downed both.
“The firing exercise tested the strike group’s entire self-defense capability, from the radars to the missile systems and everyone operating them,” said Petty Officer 2nd Class Kelly Smith, the defensive weapons coordinator for the exercise. “We also verified the ship’s self-defense capabilities to track and engage a threat.”
The Phalanx gun was fired as a maintenance check during the training off the coast of Southern California.
“If we’re under attack, today’s evolutions prove we can defend ourselves against an air strike,” said Smith. “Exercises like this are vital to the constant improvement of the strike group’s effectiveness, and Carl Vinson’s combat readiness.”
