YardDogs -
Here’s another edition of Market Monday! Today we’re taking a look at San Diego, CA.
In today’s email:
Market Overview: San Diego’s population has surpassed 3.3 million residents, driven by strong employment in trade, defense, technology, and logistics. Industrial vacancy remains among the lowest in California at roughly 4%, with sustained demand in Otay Mesa, Miramar, and Kearny Mesa. The region’s connectivity via I-5, I-8, and SR-125 — plus port and cross-border access — keeps San Diego a core logistics and IOS hub.
The IOS Opportunity: Lease rates initiated between 2023 and 2025 average $0.37 per sf per month ($16K per acre per month), with rents stretching to $0.46 per sf per month ($20K+ per acre per month) in certain pockets (like Miramar). IOS land prices can range from $1M–$4M per acre in core submarkets, with more affordable parcels in Otay Mesa and Lakeside.
Market Fundamentals: Industrial vacancy near 4% reflects tight supply, limited developable land, and elevated absorption in Otay Mesa. Infrastructure investments — including the Otay Mesa East Port of Entry (POE), SR-11 expansion, and airport modernization — continue to enhance freight flow and binational trade efficiency.
IOS Landscape: IOS activity is concentrated along Otay Mesa, Chula Vista, Miramar, and National City, serving logistics operators, construction users, and cross-border distributors . With minimal zoned inventory and redevelopment pressures, these yards are now viewed as critical logistics infrastructure rather than transitional sites.
Local Brokers & Market Experts: Scroll to the bottom for a list of active IOS experts shaping the San Diego market — special thanks to JLL, Cushman & Wakefield and Colliers for participating!
MARKET OVERVIEW
San Diego
San Diego anchors the broader Cali Baja region, a cross-border manufacturing hub spanning Imperial County and Baja California. The area leads in producing medical devices, semiconductors, aerospace components, and audio/video equipment — supported by the San Ysidro Port of Entry, the busiest land border crossing in the western hemisphere. More than $6.2 billion of the binational region’s exports stay within Cali Baja each year.1
This binational connectivity helps fuel one of the tightest and most resilient industrial markets in the western U.S. San Diego’s 3.3 million residents support a diverse base of logistics, life sciences, defense, and manufacturing jobs, while unemployment hovers near 4% and industrial vacancy remains around 3.9–4.2%.2
Kurtis Blanchard of Colliers explains the impact of the geography of the region:
“The San Diego IOS market remains very tight, this is primarily driven by the constrained nature of San Diego’s geography, bordered by Mexico to the south, the Ocean to the west, mountains to the east, and Camp Pendleton to the north. IOS sites sit in very specific pockets (The West side of Miramar, the west side of Escondido, East County San Diego, & Otay Mesa). Owner-user demand and pricing have reached record highs, while investors remain active but often struggle to compete with owner- user pricing. The ‘flight to quality’ trend continues to dominate, with occupiers prioritizing sites with multiple points of ingress/egress, level topography, secure fencing, lighting, and shops for dry storage needs.”
The city’s multimodal freight infrastructure — anchored by I-5, I-8, SR-125, and the Port of San Diego — positions it as a key regional trade gateway.
Otay Mesa continues to lead all industrial submarkets, capturing most new development and IOS-suited sites due to its proximity to the border and expanding warehousing footprint.
IOS OVERVIEW
San Diego IOS Opportunity
Industrial Outdoor Storage has emerged as a stable, high-value asset class in San Diego’s industrial landscape. Morrow Botros of Cushman & Wakefield notes:
“In San Diego, the low-coverage IOS sector continues to show strong stability. Well-located, paved, and fenced yard sites near major freeways are drawing consistent demand from both users and investors, even as other parts of the industrial market soften. With limited zoning and minimal new supply, these properties are increasingly viewed as strategic logistics assets rather than ‘leftover’ yard space.”
Across leases evaluated from 2023 to 2025, ~50% were with Equipment Rental companies that paid ~$0.32–$0.34 per sf per month (~$14-15K per month per acre) on average. The Equipment Rental average property size was 2-3 acres. Approximately 20% of leases executed were with construction businesses who paid ~ $0.41–$0.46 per sf per month (~$18-20K per month per acre). The remainder included trucking, manufacturing and commercial services businesses. The total average leased property size is 2-3 acres.
“IOS remains scarce for both users and investors in San Diego County. 2025 has been a banner year for purchase values, with high-water marks set by owner-users. Steel Peak is leading the pack with two successful exits.” - Jackson Childers, JLL
Despite rising values, the sector faces headwinds from zoning reform and redevelopment pressure.
“The biggest current challenge is zoning, as municipalities continue to crack down on heavy industrial outdoor storage uses, instead prioritizing upzoning via community plans that favor residential redevelopment across key submarkets.” - Kurtis Blanchard, Colliers
Market Fundamentals Driving IOS in San Diego
Location & Transportation: The convergence of I-5, I-8, SR-125, and the new Otay Mesa East POE gives San Diego exceptional reach across Southern California and Baja . Proximity to the Port of San Diego, air cargo terminals, and border crossings makes it a natural logistics hub.
Industrial Market Tightness: Vacancy below 4% and restrictive zoning for outdoor uses limit new supply . Redevelopment pressures and competing land uses (biotech, multifamily) further reduce inventory, strengthening rent growth and investor confidence.
Tenant & Demand Profile: Dominant users include logistics operators, construction and equipment rental firms, utilities, and fleet service providers. Cross-border distributors rely on secure IOS yards for staging between U.S. and Mexican facilities. Industrial leasing hit a seven-year high as construction and manufacturing tenants adapted to new tariffs and regulations.3
Infrastructure & Growth: The Otay Mesa East POE (target 2026), SR-11 expansion, and airport upgrades will enhance regional freight throughput4, further benefiting IOS operators and investors.
Investment Environment: Institutional capital and private buyers remain active despite owner-user demand pushing high land values amid limited supply. Many investors now view IOS as a core industrial subsector rather than an ancillary use.
The bottom line: San Diego’s IOS market is defined by scarcity, geographic constraint, and strategic trade positioning. With limited zoned inventory and escalating land costs, outdoor storage sites have evolved from overlooked parcels to mission-critical logistics infrastructure . Supported by binational freight growth and institutional capital, San Diego offers a potentially durable IOS investment environment in the western U.S.
FEATURED LISTINGS
San Diego
Otay Mesa Gateway Yard | For Lease
Otay Mesa Gateway Yard offers ±36 acres of IOS-zoned yard space for lease directly along the U.S.–Mexico border, with ±21 acres fully improved and ±15 acres of excess yard. The site is divisible to ±3 acres, secured, paved/compacted, and equipped with lighting, cameras, and more than 4,800 linear feet of trailer-stall capacity. With rare I-2 zoning in San Diego and immediate availability, it’s a strong option for logistics, drayage, and cross-border operators needing large-scale outdoor storage. Check out the listing here.
Please reach out to Greg Lewis and Andy Irwin for more information.
Sorrento Valley | For Lease
Sorrento Valley offers 1.0 to 3.5 acres of short-term dead storage, parking, and yard space with immediate access to both I-5 and I-805 in central San Diego. The site can accommodate over 500 vehicles and includes a mix of indoor and outdoor dead-storage options, totaling roughly 60,000 square feet. With lease terms up to two years, it’s an ideal solution for groups needing well-located, flexible, short-duration storage near key freeway corridors. Check out the listing here.
Please reach out to Greg Lewis, Andy Irwin and Jackson Childers for more information.
1430 National Ave | For Lease
This San Diego industrial warehouse and paved yard offers ±19,900 square feet on 2.06 acres, divisible across two lots of 1.14 acres and 0.93 acres. The property includes multiple warehouse sections, covered parking, and two oversized grade doors, with convenient access just off the I-5 and close proximity to the trolley. Priced at $17,000 per month per lot, it’s suited for manufacturing, distribution, or yard-intensive users needing a central location near Petco Park and the Gaslamp. Check out the listing here.
Please reach out to Greg Lewis, Andy Irwin and Jackson Childers for more information.
Colliers Listings
Check out the Colliers listings here or reach out to Evan and Kurtis!
LOCAL EXPERTS
Local Brokers & Market Experts
Big thanks to all participants who helped shape this week’s Market Monday in San Diego. If you’re looking to buy, sell or lease in San Diego, the people below are the ones to call!
JLL Team
Andy Irwin
Managing Director
O 858.410.6376
C 858.232.1709
[email protected]
Greg Lewis
Managing Director
O 858.410.1251
C 858.699.1629
[email protected]
Jackson Childers
O 858.352.2905
C 310.710.4340
[email protected]
Colliers Team
Evan McDonald, SIOR
Executive Vice President
O: 858.677.5339
C: 858.353.8669
[email protected]
Kurtis Blanchard
Associate Vice President
C 760.670.8367
[email protected]
Cushman & Wakefield Team
Morrow Botros
Cushman & Wakefield | San Diego
O 619.614.1383
C 760.208.8679
[email protected]
SOURCES & REFERENCES
IOS Resources
Explore other Markets
San Antonio
Nashville
Check Out Our Free IOS Underwriting Model Tool
Property Listings (For Sale or Lease) – Submit Here
Get your property in front of qualified buyers and tenants actively searching for Industrial Outdoor Storage opportunities.
📰 SHARE YOUR COMPANY NEWS Got industry news to share? Email us at [email protected] with your company updates and announcements.
Disclaimer: The authors of IOS YardDogs are not finance or tax experts. We love big yards, small buildings. This email is for educational uses and is not financial / investment advice. Please conduct independent research and consult with industry professionals before making financial or investment decisions. Our content, which may contain affiliate links, is subjective and not to be used as the only basis for such decisions. We are not responsible for any losses from relying on this information.