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How much downtown office space does the city of San Diego really need?

By Jennifer Van Grove

March 18, 2024

The San Diego Union-Tribune

Real estate consultant finds that the city can squeeze its downtown workforce into 29 percent less space if it embraces hybrid work and desk sharing.

The city of San Diego can go grow its downtown employee headcount and also considerably shrink its civic core office footprint — but it will need to provide ample parking to keep its workers happy, according to a new report prepared by a city real estate consultant.

San Diego can go from 2,870 downtown employees currently using 819,000 square feet of space to a future state where 3,060 employees use just 580,000 square feet, real estate consultant Jones Lang LaSalle has determined.

Monday, city staff presented the finding to San Diego City Council members, some of whom were baffled by the conclusion. Two council members balked at the findings — albeit for opposite reasons. Another implied the research was a waste of money.

“As long as the city’s teleworking policy and remote and hybrid options are utilized, our study concluded, when looking at an overall average, that we would still need fewer overall workstations and can reduce our total office footprint by 239,000 square feet,” Niki Chalfant, a program manager in the city’s economic development department, told council members. “This assumes an average of a 1.5 desk-sharing ratio with an average of 162 square feet per workstation.”

Currently, downtown city workers have their own dedicated desks that take up 272 square feet, on average, and are subject to in-office work requirements that vary by department, the report states.

The less-is-more conclusion comes more than 15 months after San Diego hired JLL to determine how the city could adapt — and theoretically downsize — given a pandemic-driven shift in workplace norms. At the time, City Council members signed off on a five-year, $725,000 consultant contract with JLL. The firm’s research is meant to inform the simultaneous, mayor-led effort to pursue an all-new City Hall that could accommodate the entire downtown workforce.

To date, JLL has completed three of four, planned phases, eating up around half of the available budget, Chalfant said. The firm has studied existing working conditions downtown, as well as conducted interviews and surveys with department heads and city workers.

The quantitative and qualitative work has been married with industry research to conclude that the city could make do with roughly 29 percent less space if employees in some departments share smaller desks.

At the same time, a majority of employees — or 68 percent of employees who participated in the JLL survey — stated a preference for larger workstations and additional privacy.

Employees most pressing concern, however, is parking, with 80 percent of respondents ranking it as their top desired amenity. The city’s two main parking garages — adjacent to the City Administration Building, City Operations Building and Civic Center Plaza building — can currently accommodate 1,500 cars, and demand exceeds supply, Chalfant said.

Councilmember Jennifer Campbell questioned the study’s findings, repeating the concerns she stated last week when the work was first presented to the city’s Economic Development and Intergovernmental Relations Committee.

“We’re having trouble fitting the people in this building now, and you (want to) make a much smaller space, square footage wise ... . To me, it doesn’t compute,” she said. “I wouldn’t put much credence on two days a week in the office. Most of us need most of the week in the office.”

Councilmember Joe LaCava expressed the opposite sentiment.

“I have to admit, I would have expected a little bit bigger shift when we’re hearing that people are leaving San Diego because they can work from home (and) office buildings are hurting because companies are downsizing in terms of their office space, even though their operations might be bigger.”

LaCava also pondered aloud the disconnect between city policies that strive to reduce greenhouse gas emissions from cars and employees stated preference to drive to work.

“We have a climate action plan. And yet we saw a strong preference for essentially single occupancy cars for employees,” he said. “They want parking spaces, one can understand that. If you don’t have a parking space or a parking pass in the (Civic Center) Parkade, it gets to be a pretty painful exercise.”

Councilmember Vivian Moreno said she wanted to pull the plug on JLL’s office space analysis and pocket the remaining contract funds, or roughly $362,500, for more pressing needs. San Diego, she noted, faces a $167 million budget deficit for the upcoming fiscal year.

“Given the current budget projections, I am very concerned that continuing to spend money on this contract is no longer a priority. I’d rather have the remaining funds currently allocated to this contract available for the general fund purposes of fiscal year 2024,” she said. “Eliminating this contract, along with many other outside consultant contracts, will help balance the budget and prevent cutting city services that San Diegans very much need.”

JLL’s work will continue as planned, Christina Bibler, who runs the economic development department, told the Union-Tribune.

“This was an informational item and no formal direction from council was given to change course at this time. We will proceed with the current contract obligations,” Bibler said.

Next up, the city will work alongside JLL to pilot a desk-sharing model with the city’s risk management department. In April, the department, which currently takes up two floors, will be consolidated onto one floor.

The report comes as San Diego, with the help of consultant P3 Advisors, evaluates whether it should build a new City Hall or buy an existing downtown property.

The city has been contemplating a replacement headquarters at the direction of Mayor Todd Gloria. Gloria last year pressed forward with a two-pronged approach to offload five, city-owned blocks in the city’s municipal core to pay for a new City Hall. But the city’s first attempt to sell or lease land failed, for the most part, to attract developer interest. The blocks are expected to be marketed for sale or lease once again later this year.

Meanwhile, P3 Advisors’ build-or-buy City Hall analysis is on track to be completed at the end of the month, Jay Goldstone, a special adviser to Gloria, told the Union-Tribune. JLL’s square footage calculations reflect net usable space, meaning the city will likely need between 625,000 square feet and 725,000 square feet of gross space for a new City Hall, when factoring in walkways, elevators, restrooms and building lobbies.

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