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Silicon Valley Market Reports

Silicon Valley Office Market

Average FS Asking Rent (Price/SF)     
    $4.21
Availability Rate (%)       8.9%
Net Absorption (SF) 461,828

Following a slow start to the year in the first quarter of 2019, office activity has once again started to pick up in the Silicon Valley. Due to a number of large deals being signed and very few new large spaces coming to market to counter them, the market posted 461,828 square feet of positive net absorption. As a result, availability dropped 1.1 percentage points to 8.9% overall for the market. Overall asking rents dropped $0.04/SF to $4.21/SF, as multiple large and highly priced spaces were leased in Santa Clara, Sunnyvale and Mountain View.

Silicon Valley Industrial/Warehouse Market

Industrial

Average NNN Asking Rent (Price/SF)      
      $1.30 
Availability Rate (%)        3.0%
Net Absorption (SF) -117,875

Warehouse

Average NNN Asking Rent (Price/SF)            $.96
Availability Rate (%)           9.7%
Net Absorption (SF)   -597,920

The industrial market posted slightly higher absorption in the second quarter of 2019 than in the first quarter but remained relatively slow with negative 117,875 square feet of net absorption. This was due to a combination of a slowing leasing velocity and the introduction of new spaces to the market. After hitting as high as $1.46/SF in the fourth quarter of 2018, the asking rate decreased for the second quarter in a row, falling $0.14/SF to $1.30/SF.

The Silicon Valley warehouse market had another slow quarter, but with negative 597,920 square feet of net absorption, it looked significantly stronger than in the previous two quarters. Although the net absorption figure was brought down by several large blocks of space hitting the market, gross absorption was strong with 792,356 square feet, mainly supported by the large number of lease renewals. The total market's availability rate rose 1.5 percentage points to 9.7%, and average asking rates increased very slightly to $0.96/SF.

Silicon Valley R&D Market

Average NNN Asking Rent (Price/SF)       $2.23
Availability Rate (%)         9.7%
Net Absorption (SF)  -194,278

The Silicon Valley R&D market remained relatively slow in the second quarter of 2019, ending up with negative 194,278 square feet of absorption. Although we saw a steady number of deals signed this quarter, a large number of the deals were in the form of user sales or lease renewals, and the positive net absorption was not enough to offset the new R&D spaces that became available. Despite the negative net absorption of the second quarter, the demolition of almost one million square feet of inventory caused the availability rate to drop 0.06 percentage points to 9.65%, while the asking rate rose very slightly to $2.23/SF. This is the sixth straight quarter that showed a rise in average asking rates and a decrease in the availability rate.



Silicon Valley Office Market Report
2Q19
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Silicon Valley R&D Market Report
2Q19
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Silicon Valley Industrial Market Report
2Q19
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