The Current State of the Mission Valley Class B Office Market in 2026
The Mission Valley office market in 2026 is competitive, but it is also showing signs of resilience. The market information and statistics in this article are summarized from CoStar’s San Diego Office Market Report dated August 27, 2026. It is important to note that CoStar reports most Mission Valley statistics for the office submarket as a whole rather than specifically for Class B properties. Where this article discusses Class B office trends, we clearly distinguish Mission Valley overall data from CoStar’s San Diego wide 3 Star office data, which is the closest comparable category to traditional Class B space.
For owners of Class B office buildings, the current environment is not defined by a single trend. Vacancy remains meaningful, tenants continue to have negotiating leverage, and leasing decisions are taking longer than they did before the pandemic. At the same time, Mission Valley is benefiting from positive absorption, relatively stable asking rents, central location, free parking at many properties, and the absence of new office construction.
According to CoStar, Mission Valley contains approximately 7.49 million square feet of total office inventory, has a 12.0% overall office vacancy rate, and recorded approximately 131,971 square feet of positive net absorption over the past 12 months. CoStar reports an average asking rent of approximately $3.13 per square foot per month for the entire Mission Valley office submarket. That $3.13 figure is not a Class B only asking rent.
For Mission Valley Class B office owners, the data points to a market where strong property management, competitive leasing strategy, tenant retention, and thoughtful capital improvements matter more than ever.
Mission Valley Overall Office Vacancy Is 12.0%
CoStar reports approximately 899,603 square feet of vacant office space in Mission Valley, representing a 12.0% vacancy rate for the overall Mission Valley office submarket. This figure includes office properties across different quality levels and should not be interpreted as a Class B only vacancy rate.
That puts Mission Valley below the overall San Diego office market vacancy rate of 14.0% reported by CoStar.
Mission Valley’s overall vacancy rate is also below several other major San Diego office submarkets. According to CoStar:
Downtown vacancy is 32.5%
Sorrento Mesa vacancy is 25.4%
Sorrento Valley vacancy is 19.2%
Scripps Ranch vacancy is 16.8%
Carlsbad vacancy is 15.2%
UTC vacancy is 14.2%
Mission Valley vacancy is 12.0%
These figures are submarket wide vacancy rates, not Class B only rates. They indicate that Mission Valley overall remains competitive relative to several larger San Diego office submarkets.
Mission Valley Class B Office Market 2026Has Recorded Positive Net Absorption
One of the more encouraging indicators in the CoStar report is Mission Valley’s positive absorption.
CoStar reports approximately 131,971 square feet of positive net absorption during the past 12 months, equal to approximately 1.8% of Mission Valley’s total office inventory. This figure represents the entire Mission Valley office submarket rather than Class B properties alone.
Positive absorption means more office space was occupied than vacated during the period.
That is meaningful because the broader San Diego office market experienced negative absorption.
CoStar reports approximately 252,000 square feet of negative net absorption across the overall San Diego office market over the past 12 months.
Mission Valley’s positive absorption therefore stands out against the broader regional trend.
Mission Valley Overall Asking Rent Is Approximately $3.13 Per Square Foot
This distinction is especially important when discussing asking rents.
CoStar reports a current market asking rent of approximately $3.13 per square foot per month for the overall Mission Valley office submarket. CoStar also reports that Mission Valley asking rents increased approximately 0.7% during the past 12 months.
The $3.13/SF figure should not be described as the average asking rent for Mission Valley Class B office properties.
The CoStar submarket table combines the Mission Valley office inventory and does not provide a separate Mission Valley 3 Star or Class B asking rent in this report.
Mission Valley overall remains less expensive than several higher priced San Diego office submarkets.
CoStar reports the following overall submarket asking rents:
Del Mar Heights and Carmel Valley: $5.28/SF
North Central County: $4.67/SF
UTC: $4.42/SF
North Beach Cities: $4.16/SF
La Jolla: $4.07/SF
Torrey Pines: $4.00/SF
Sorrento Mesa: $3.87/SF
Mission Valley: $3.13/SF
These are overall office submarket asking rents rather than Class B only asking rents.
The comparison still demonstrates Mission Valley’s broader value proposition for businesses seeking a central San Diego location without the asking rents associated with several premium coastal and North County office markets.
What Does CoStar Tell Us About Class B Office Properties?
CoStar does not use traditional Class A, Class B, and Class C terminology in this report. Instead, properties are categorized using Star ratings.
For purposes of this market discussion, 3 Star properties provide the closest CoStar comparison to what the commercial real estate industry commonly considers Class B office space.
Across the entire San Diego office market, CoStar reports approximately:
53.36 million square feet of 3 Star office inventory
12.6% vacancy
14.3% availability
$3.25/SF per month average asking rent
41,350 square feet of negative net absorption during the current quarter
These figures apply to 3 Star office properties throughout the San Diego market. They are not Mission Valley specific.
CoStar also reports that vacancy in San Diego 3 Star properties has reached a 13 year high and that the category has experienced approximately 400,000 square feet of negative net absorption during the past four quarters.
For Mission Valley Class B owners, these broader 3 Star trends provide useful context, but they should not be substituted for Mission Valley specific Class B statistics.
Why the Difference Matters for Property Owners
Market statistics become less useful when different data sets are blended together.
For example, it would be inaccurate to say:
“Mission Valley Class B asking rents average $3.13/SF.”
CoStar does not establish that in this report.
The more accurate statement is:
“CoStar reports an overall Mission Valley office asking rent of $3.13/SF per month. Separately, San Diego wide 3 Star office properties have an average asking rent of $3.25/SF per month.”
Keeping these figures separate gives owners a clearer picture of what the underlying data actually shows.
An individual Mission Valley Class B property could have an asking rent above or below either figure depending on factors such as:
Building condition
Location
Parking
Suite size
Views
Renovations
Amenities
Lease structure
Tenant improvement package
Building occupancy
Management quality
Competitive properties
For this reason, property specific lease comparables remain important when establishing the correct asking rent for an individual Mission Valley office building.
Smaller Tenants Are Driving Leasing Activity
One of the most important trends in CoStar’s report is the concentration of leasing activity among smaller tenants.
CoStar reports that approximately 85% of new office leases signed in San Diego this year have been for less than 5,000 square feet, while approximately three quarters have been under 3,000 square feet.
This is a San Diego wide trend, but it is particularly relevant for Mission Valley Class B office owners.
Many Class B properties are well suited for:
Professional services firms
Insurance companies
Accounting firms
Law firms
Healthcare related businesses
Financial services companies
Real estate firms
Contractors
Nonprofit organizations
Local and regional businesses
These tenants often seek functional, well located office space without the occupancy costs associated with newer premium office properties.
Move In Ready Suites Have a Major Advantage
CoStar identifies move in ready suites as an increasingly important leasing advantage.
According to the report, prebuilt office suites have leased an average of nine months faster than spaces requiring additional work. This is a San Diego market trend rather than a Mission Valley only statistic.
For Class B owners, the implication is significant.
A vacant suite that requires substantial construction before a tenant can occupy it often faces a longer marketing period, larger tenant improvement obligations, and additional leasing friction.
Owners should evaluate whether targeted improvements make sense before placing a vacant suite on the market.
Those improvements often include:
New carpet or flooring
Fresh paint
Updated lighting
Improved break rooms
Updated conference rooms
Modernized reception areas
Improved restrooms
Better signage
Updated common areas
The objective is not necessarily to convert a Class B property into a Class A building.
The objective is to create a clean, functional, attractive office environment that compares favorably with the other spaces prospective tenants are touring.
Large Office Users Remain More Cautious
CoStar reports that larger office occupiers throughout San Diego continue to reduce space needs and limit new commitments.
New leases above 25,000 square feet have declined to a 10 year low, while larger tenants increasingly favor renewals over relocations.
For Mission Valley office owners, this means leasing strategies should reflect the demand that exists today.
Owners of larger vacant suites should evaluate whether subdivision opportunities or smaller suite configurations improve marketability.
Existing larger tenants also deserve significant attention because retaining them often represents a more efficient path to maintaining occupancy than replacing them after a vacancy.
Renewals Are Becoming More Important
CoStar reports that office renewal rates across San Diego are approximately 25% above pre pandemic norms.
Tenants are frequently choosing to remain in place rather than incur the cost and disruption associated with relocation.
For property owners, this reinforces the importance of tenant retention.
Strong retention begins well before a lease expiration.
Property owners and managers should focus on:
Responsive tenant communication
Fast maintenance response
Reliable HVAC
Clean common areas
Professional landscaping
Vendor accountability
Property security
Consistent management presence
Early lease renewal discussions
Satisfied tenants have fewer reasons to consider competing properties.
Concessions Remain Part of Office Lease Negotiations
CoStar reports that concession packages have become standard in San Diego office lease negotiations.
The report states that tenants often secure approximately one month of free rent for each year of the lease term. Tenant improvement allowances for first generation spaces have increased above $100/SF in some transactions, while second generation spaces often receive more than $50/SF for improvements.
These are broader San Diego office market observations and should not be interpreted as standard Mission Valley Class B concessions.
The underlying lesson for property owners is that face rent alone does not determine the economics of an office lease.
Owners should evaluate:
Base rent
Free rent
Tenant improvement allowances
Leasing commissions
Operating expenses
Lease term
Annual increases
Capital required before occupancy
A lease with a strong asking rent does not necessarily produce a strong return if the concession package is excessive.
Free Parking Gives Mission Valley an Important Advantage
Mission Valley has a competitive advantage that should not be overlooked: parking.
CoStar notes that monthly parking in newer Downtown office buildings can reach approximately $250 per space, while older Downtown towers often charge around $200 per space.
CoStar specifically identifies Mission Valley as one of the suburban office markets where free parking is common.
For employers encouraging employees to return to the office, convenient free parking reduces both cost and commuting friction.
For Mission Valley Class B owners, parking should be treated as an important part of the property’s leasing value proposition.
Mission Valley Has No New Office Construction Underway
CoStar reports no office properties currently under construction in Mission Valley.
New office construction creates additional competition for existing buildings. Without new Mission Valley office supply entering the market, owners of existing properties are not facing a new wave of competing office inventory.
The broader San Diego construction pipeline is also limited.
CoStar reports approximately 599,392 square feet of office space under construction across the San Diego market, with much of the development concentrated in medical office or build to suit projects rather than traditional speculative office development.
For existing Mission Valley Class B properties, limited new construction is a favorable supply factor.
Mission Valley Has Recorded Significant Leasing Activity
CoStar identifies notable Mission Valley transactions among the larger San Diego office leases completed during the past 12 months.
At 350 Camino De La Reina, Alliant Insurance leased approximately 52,196 square feet.
At Tower 591, HDR completed a lease of approximately 25,308 square feet.
CoStar also reports positive absorption at both properties.
350 Camino De La Reina recorded approximately 41,732 square feet of 12 month net absorption, while Tower 591 recorded approximately 25,964 square feet.
These transactions demonstrate that larger leasing activity continues to occur in Mission Valley even as the broader San Diego office market becomes increasingly dependent on smaller tenants.
What Should Mission Valley Class B Owners Focus on in 2026?
The current market rewards active ownership.
Class B office buildings should not rely solely on location or advertised rent.
Owners should continually evaluate how their properties compare with competing buildings.
Important questions include:
Is the asking rent supported by comparable properties?
Are vacant suites move in ready?
Are common areas attractive and professionally maintained?
Is parking convenient?
Is HVAC reliable?
Are maintenance requests handled quickly?
Are lease renewals being addressed early?
Are tenant improvement packages financially appropriate?
Are vacant suites configured for smaller tenants?
Are property management and leasing working together?
These factors increasingly influence which Class B buildings maintain occupancy and which struggle to compete.
Integrated Property Management and Leasing Matter More in This Market
The current Mission Valley office environment reinforces the importance of integrating property management and leasing.
Property management sees what is happening inside the building every day.
Leasing sees what prospective tenants are comparing the building against.
When those functions work together, ownership receives better information about:
Tenant satisfaction
Lease renewals
Vacancy
Suite condition
Competing properties
Asking rents
Tenant improvement requirements
Common area improvements
Maintenance concerns
Market feedback
At McKee Commercial | The Herbert Group, our property management and leasing services are integrated.
Our office is located in Old Town, directly adjacent to Mission Valley, and we manage several large office properties in the area.
That local presence gives our team direct familiarity with Mission Valley properties, tenants, vendors, leasing conditions, and operating challenges.
The Outlook for Mission Valley Class B Office
The current CoStar data supports a balanced outlook.
Mission Valley is not immune to the challenges facing the office sector.
Tenants continue to reduce footprints, larger occupiers remain cautious, concessions remain common, and Class B properties face significant competition.
At the same time, the overall Mission Valley office submarket has several meaningful strengths:
12.0% overall office vacancy
Positive 12 month net absorption of approximately 131,971 square feet
Overall asking rents of approximately $3.13/SF per month
0.7% annual overall asking rent growth
No new office construction
Free parking at many properties
Central San Diego location
Continued leasing activity
Again, the vacancy, absorption, and $3.13/SF asking rent figures above apply to Mission Valley office properties overall. They are not Class B only statistics.
Frequently Asked Questions About the Mission Valley Office Market
What is the current Mission Valley office vacancy rate?
CoStar reports an overall Mission Valley office vacancy rate of 12.0% as of August 2026. This is not a Class B only vacancy rate.
What are current Mission Valley office asking rents?
CoStar reports an average asking rent of approximately $3.13 per square foot per month for the overall Mission Valley office submarket. This figure includes the broader office inventory and should not be represented as a Class B only asking rent.
What is the current Mission Valley Class B asking rent?
The CoStar report used for this article does not provide a Mission Valley specific Class B or 3 Star asking rent.
CoStar separately reports that 3 Star office properties across the entire San Diego market have an average asking rent of approximately $3.25/SF per month. That $3.25 figure is San Diego wide and should not be presented as the Mission Valley Class B asking rent.
Are Mission Valley office rents increasing or decreasing?
CoStar reports that overall Mission Valley market asking rents increased approximately 0.7% over the past 12 months.
Is Mission Valley experiencing positive office demand?
Yes. CoStar reports approximately 131,971 square feet of positive net absorption across the overall Mission Valley office submarket during the past 12 months.
Is new office space being built in Mission Valley?
CoStar reports no office properties currently under construction in Mission Valley.
The Bottom Line for Mission Valley Class B Office Owners
The Mission Valley Class B office market in 2026 remains competitive, but the overall Mission Valley data provides several encouraging indicators.
Mission Valley overall is recording positive absorption, its vacancy rate remains below the broader San Diego office market, asking rents are relatively stable, and no new office construction is adding additional supply.
It is important, however, to interpret the statistics correctly. CoStar’s 12.0% Mission Valley vacancy rate, $3.13/SF asking rent, and 131,971 square feet of positive absorption are figures for the Mission Valley office submarket overall. They are not Class B only statistics. CoStar’s separate 3 Star statistics provide useful context for Class B owners but cover the entire San Diego market.
The strongest opportunities are likely to go to Class B properties that combine competitive economics with professional management, responsive maintenance, strong tenant relationships, attractive suites, convenient parking, and proactive leasing.
For Class B property owners, the current market places a premium on execution.
McKee Commercial | The Herbert Group provides integrated commercial property management, leasing, property accounting, maintenance coordination, and commercial real estate sales services for Mission Valley property owners.
Our office is located adjacent to Mission Valley in Old Town, and our team manages several large office properties in the area.
Contact McKee Commercial | The Herbert Group to discuss your Mission Valley office property, leasing strategy, tenant retention plan, or commercial property management needs.
Source
CoStar, San Diego Office Market Report, prepared August 27, 2026. Market statistics and leasing trends cited in this article are derived from this report. Mission Valley figures are identified as overall submarket statistics unless specifically noted otherwise.
