Today we ponder the intensely studied world of commercial real estate, which includes retailing, industrial, office, apartment and hotel properties, in effect the full panoply of project types that equity-rich investors lust after.

This sector is a big part of San Diego’s economic story — a story about a wonderful rapidly growing community with a paucity of developable land. No, let’s restate that: a paucity of land that the government will allow you to develop.

Home prices, fable has it, have increased exponentially in recent years in San Diego County. The reason for that is the same reason commercial property has experienced Mr. Toad’s wild ride: we’re pretty much out of commercial land in the urban core. Many of the cities in the county have less than a 10-year supply of developable land in their present general plan.

From a retailer’s standpoint, San Diego is la-la land. In the entire county, probably only one more regional center will be constructed, that in the eastern urban corridor of Chula Vista, aligned with the State Route 125 corridor. We are almost out of sites for power centers. In the southern portion of the county, retailers are blessed with the additional bonus of business from Tijuana residents.

For these reasons, the typical vacancy rates in retail centers in the county is in the 4 percent to 5 percent range and rents rise routinely. Landlords with participating rents have a field day.

San Diegans pay about 25 percent more for grocery store food and beverages because our competition is limited to a very few supermarket chains, most of which are in locked-in locations. In the urban core, the money-saving entities like Wal-Mart are basically locked out. Therefore, like our gas stations where six brands own 90 percent of the stations and independents don’t have a chance, supermarkets have free rein.

In the world of industrial property, the situation is even worse. With the exception of Otay Mesa, the county industrial land base is essentially exhausted. Further, because industrial land is by nature underutilized, developers regularly try to buy industrial land to convert to other uses.

In addition, because business is good, the vacancy rates in modern industrial space are generally about 5 percent. That’s low.

Office space in San Diego also is cherished. In most metropolitan areas today, the vacancy rate in office space is on the order of 15 percent to 25 percent, a clear disaster. But in San Diego, it is in the 10 percent range. Blessedly, we did not overbuild office space in recent years like San Jose, Dallas and Houston.

Typically, in years past, investors big and small demanded a cash-on-cash yield of 8 percent to 10 percent on their money. Pay $1,000, get an $80-$100 annual return. Here in San Diego, with interest rates at a national low and properties with a supply/demand imbalance, we find even the big players are willing to accept cash yields as low as 4 percent and 5 percent to romp in our playpen.

In the apartment business, the story is the same. Rents in San Diego County have barely kept even with inflation. The vacancy rate today is 5 percent, which indicates something less than a tight market. Yet, the investor market craves apartment properties of any size and will pay dearly for them.

In the apartment world of San Diego County, there are very few high-quality large rental properties. At the bottom of the feeding chain are 40,000-plus rental properties. There are also thousands of equity-rich homeowners who want to become landlords by buying small properties. The owners of those small rental properties then want to trade up in a tax-deferred 1031 exchange into larger properties, and so it goes. More and more apartment owners are trying to buy larger projects, which are getting scarcer. In addition, the largest properties are hotly battled for by national real estate investment trusts, high net worth individuals, and now, condo converters.

All of these factors result in San Diego being one of the truly “hot” apartment markets in the nation.

In addition, the future construction of new apartments is not an encouraging situation. The price of multi-family land in the county is rising to new heights with most multi-family zoned land being sold to condominium developers because they can afford to pay more than rental property developers. Therefore, we have a relatively static inventory of rental apartments. Better yet from an investor standpoint, most cities have worked diligently to eliminate their supply of multi-family land during the past two decades, so the supply of multi-family land is increasingly meager.

Overall, the world of the commercial property buyer is a difficult one. Does one invest in markets like Phoenix, Orlando and Charlotte where prices are rational but with massive gluts of commercial property (particularly apartments) or instead bite the bullet and pay top dollar to be in a supply-constrained growing market like San Diego? Tough choice. But awfully good for San Diego property owners.

Alan N. Nevin is director of economic research with MarketPointe Realty Advisors (marketpointe.com), a consultancy providing real estate and demographic statistics, feasibility studies and litigation support to the California land use industry and legal professions. Nevin can be reached by e-mail at anevin@sandiegometro.com.