“The San Diego region is finding stability in publicly funded or mandated-driven projects. Three key sectors—health care, student housing and community colleges—are performing exceptionally well due to secure funding,” he says.

California’s Senate Bill (SB) 1953, which sets seismic safety requirements for hospitals, has been the primary driver behind the increased investment in health care projects. Medical buildings providing acute care must meet these requirements by 2030. This mandate is driving an industrywide push to retrofit or replace aging facilities. 

Private sector projects, in comparison, have continued to struggle. “The recovery of the private development sector could be a few years out and depend largely on the cost of capital,” Betz notes. “High interest rates and federal funding changes are a couple of the main barriers preventing a comeback in the near future.”