ESET unveils new HQ downtown as office vacancies rise
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The "living room" in the new ESET office downtown. Photo: Provided by ESET.
Global cybersecurity firm ESET has opened a new North American headquarters in downtown San Diego.
Why it matters: The investment in a smaller, state-of-the-art facility comes as the local market continues to battle rising office vacancy rates as companies are shrinking their physical footprints to accommodate more remote and hybrid work.
Inside the room: The 24,000-square-foot office at 655 Broadway St. near the waterfront will support more than 200 local and remote employees in a more consolidated way.
- Designed for hybrid workers, it features flexible, modular office spaces, an outdoor patio, access to a gym with classes, entertainment and event spaces, and proximity to public transportation.
What they're saying: In addition to creating a more intentional space for employees, it was important for ESET to maintain its downtown presence as a hub for the community organizations they partner with, vice president of sales and marketing Ryan Grant told Axios.
State of play: Overall, office vacancies are rising countywide, reaching a decade-high 14.2% in Q3 of this year, in part due to more supply, according to CBRE's latest report. Downtown, total office vacancy hit 25% in the third quarter.
- Yes, but: While vacancies and availability remains high, demand was up for downtown and Class A office space — the newest, highest-quality and most-expensive buildings in the market.
- That demand has pushed the average asking rent to an all-time high, suggesting that those making leasing decisions are seeking high-end spaces, per CBRE.
Zoom out: Nationally, office vacancy rates reached a record 20.1% this year and are projected to climb through 2026.
Between the lines: The new ESET headquarters are a few blocks from the highly-anticipated IQHQ Research and Development District, or RaDD, on the waterfront.
- That $1.6 billion development project has added retail tenants but struggled to entice biotech and life sciences companies to fill the space, as was intended.
- It's one of three massive mixed-use developments contributing to heightened vacancy downtown, along with Horton Plaza and WEST.
The Irvine Co., a real estate firm that's the largest office landlord in San Diego, with 70 properties, recently sold Symphony Towers at a low price and put two other downtown towers on the market.
- Other downtown office high-rises are defaulting and converting to residences.
What we're watching: The "fortunes of downtown" can change if one of those three major downtown developments lands a significant lease from a large technology, life science or law firm they were built to attract, Tyler Jemmett, first vice president of CBRE San Diego, told Axios.