Location case  ·  Defense and dual-use  ·  September 2026

Build it in San Diego

R&D, engineering and test, against the Bay Area
42%Lower R&D asking rent than Silicon Valley
$23.5MLess a year to run 500 people
16–22%Less engineering pay than San Francisco
3.9×The Bay Area's defense contract flow
Prepared forA defense and dual-use hardware companyChoosing where to build its next R&D site
MERIDIANTENANT ADVISORS
01   What the space costs

R&D asking rents run 42% below Silicon Valley.

R&D asking rent · $/SF/month, triple net · Q2 2026San DiegoBay Area
San Diego County
$1.75
Silicon Valley
$3.01
Peninsula · San Mateo Co.
$5.82

Silicon Valley is 1.7× the rate. San Diego and Silicon Valley come from the same firm, the same quarter and the same triple-net basis, with no conversion between them. The Peninsula figure is a different firm, and that inventory is weighted to South San Francisco lab space.

$625A year

City business tax for a hundred-person company in San Diego, flat whatever the revenue. San Francisco taxes gross receipts above $5M at 0.250–1.512% (manufacturing) or 1.000–1.680% (scientific and technical services), plus a homelessness tax above $25M and a $20,000 registration fee.

What it costs to operate

$23.5M less a year to run a 500-person company.

$63.2MSan Diego
$86.7MSan Francisco Bay Area
$23.5Ma year, 27% less

CBRE cost model: 500 technology employees, 60,000 SF of office, 2024 wages and office rents in each market. Hover a bar for the per-head and monthly figures.

Build it in San DiegoThe cost case
02 / 06Meridian Tenant Advisors ·  Location caseSample deliverable: the client is fictional. Figures are published market and government data, described on each page.
02   What the engineers cost

Engineers cost 16 to 22% less than in San Francisco.

Annual mean wage · one BLS release · three metrosSan DiegoSF–Oakland–FremontSan Jose

Software developers

16% under SF  ·  26% under San Jose
San Diego
$163,300
SF–Oakland–Fremont
$193,430
San Jose
$221,710

Electrical engineers

19% under SF  ·  31% under San Jose
San Diego
$131,220
SF–Oakland–Fremont
$162,170
San Jose
$189,370

Mechanical engineers

22% under SF  ·  25% under San Jose
San Diego
$124,420
SF–Oakland–Fremont
$158,690
San Jose
$165,920

25 to 31% under San Jose on the same three roles. All nine figures come from the same release, so the gaps are like for like.

And the people are here
176,906

Veterans in San Diego County

6.9% of the adult population, and more than the whole SF–Oakland–Fremont metro at 108,380. Four times San Jose.

2,920

Engineering degrees from UC San Diego

In 2024–25, out of 10,240 enrolled. UC San Diego is 4th nationally in federally financed R&D, ahead of Stanford (NSF HERD, FY2024).

26.1 min

Mean one-way commute

Against 32.7 in San Francisco. About 55 hours a year back per employee, at 250 in-office days.

Build it in San DiegoThe engineers
03 / 06Meridian Tenant Advisors ·  Location caseSample deliverable: the client is fictional. Figures are published market and government data, described on each page.
03   The customer is already here
$11.67B

Defense contract obligations on work performed in San Diego County, FY2025.

Four Bay Area counties do not reach a third of it.

DoD prime contract obligations by place of performance · FY2025
San Diego County
$11.67B
SF, Santa Clara, Alameda & San Mateo
$3.02B
63Navy ships homeported in the region, and one of every six sailors in the Navy.
109,000Active-duty service members, plus 27,000 Department of Defense civilians.
5,200+People on NIWC Pacific's workforce, which writes and awards its own contracts.
22.2%Of San Diego's gross regional product is military-related: $61.3B, on $39.3B of direct spending.
NAVWARbuys networks, C2, cyber and information warfare from its Old Town campus. NIWC Pacific's labs sit on Point Loma.
Third Fleetruns West Coast experimentation from Naval Base Point Loma.
Coronadoholds carrier aviation, Naval Special Warfare and the San Clemente Island range.
Miramarholds 3rd MAW, minutes from the R&D submarkets. Camp Pendleton puts I MEF within an hour north.
Saronicopened an 80,000 SF facility downtown in 2025. San Diego-based Firestorm Labs and Seasats raised Series A rounds in 2025 and 2026 to scale production.

Contract figures: federal award data, obligations by place of performance.

Build it in San DiegoThe customer
04 / 06Meridian Tenant Advisors ·  Location caseSample deliverable: the client is fictional. Figures are published market and government data, described on each page.
Map of San Diego with the naval bases, NAVWAR, MCAS Miramar, UC San Diego and drive routes from Kearny Mesa
04   Where the customer is

Every gate inside half an hour of the R&D submarkets.

Pick a submarket to draw its routes. Hover a row to find the site on the map.

Minutes, free-flowKearny MesaUTCSorrento Valley
1
NAVWARBuys networks, C2, cyber and information warfare
1210.0 mi1411.9 mi1714.2 mi
2
Naval Base San DiegoMain gate on 32nd Street, at the fleet piers
1511.6 mi2016.9 mi2219.0 mi
3
Naval Base Point LomaThird Fleet experimentation and NIWC Pacific's labs
2316.0 mi2620.0 mi2822.1 mi
4
Naval Air Station North IslandCarrier aviation and Naval Special Warfare
1614.2 mi2119.6 mi2321.7 mi
5
MCAS MiramarMarine aviation, on the I-15 corridor
97.0 mi1410.8 mi1513.0 mi
6
UC San Diego2,920 engineering degrees a year; 4th nationally in federally financed R&D
1211.4 mi52.0 mi74.8 mi

Free-flow drive time at posted speed limits on the Mapbox road network, from the center of each submarket to the main gate or campus. Peak-hour times run longer. Imagery © Mapbox © Maxar. Streets © OpenStreetMap.

Build it in San DiegoWhere the customer is
05 / 06Meridian Tenant Advisors ·  Location caseSample deliverable: the client is fictional. Figures are published market and government data, described on each page.
05   And the Bay is still a morning away

337 nonstops a week to the Bay Area.

Nonstop departures a week from San Diego InternationalScheduled time
SFOSan Francisco
1h42m140
SJCSan Jose
1h34m112
OAKOakland
1h46m85

About 48 a day. Alaska and Southwest fly all three; United and Frontier serve SFO. Investors and Bay Area program offices stay close.

Free-flow drive time from the terminal
6minDowntown
8minNAVWAR
17minKearny Mesa
17minUTC · La Jolla
18minSorrento Valley

The airport sits three miles from downtown, so the whole defense corridor is a short drive from the terminal.

Next steps

From the case to a shortlist.

01ShortlistR&D and flex buildings in Kearny Mesa, UTC and Sorrento Valley, screened against the program: lab, high bay, test yard, secure space.
02Secure spaceConfirm SCIF and facility clearance needs with the program office before touring. It narrows the buildings that work.
03TourThe shortlist in one day, with the drives to NAVWAR, the 32nd Street gate and Miramar on the clock.
04CompareOccupancy cost on the finalists against the Bay Area option, on the same term, allowance and escalation.
Nadia Ferrante, PrincipalMeridian Tenant Advisors  ·  (619) 555-0134  ·  nferrante@meridian.example
Build it in San DiegoThe Bay and next steps
06 / 06Meridian Tenant Advisors ·  Location caseSample deliverable: the client is fictional. Figures are published market and government data, described on each page.