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Silicon Valley Market Reports

Silicon Valley Office Market

Average FS Asking Rent (Price/SF)     
    $4.33
Availability Rate (%)       9.0%
Net Absorption (SF) 129,780

Office activity in Silicon Valley remained strong in the third quarter of 2019, posting positive net absorption for the eighth quarter in a row and bringing the year-to-date total absorption to just under 1 million square feet. Although the office market showed a slight slowdown with net absorption of 129,780 square feet compared with the second quarter's 461,828 square feet, the total number of square feet leased increased by more than 1.8 million to 4,458,232 square feet. A few new large Class A listings in Santa Clara and Mountain View pushed the average asking rates up $0.12/SF to $4.33/SF and the total availability rate up 1.2 percentage points to 9.04%.

Silicon Valley Industrial/Warehouse Market

Industrial

Average NNN Asking Rent (Price/SF)      
      $1.49 
Availability Rate (%)        3.4%
Net Absorption (SF) -225,811

Warehouse

Average NNN Asking Rent (Price/SF)            $.98
Availability Rate (%)           7.7%
Net Absorption (SF)   -776,325

The industrial market had a relatively slow quarter, posting a negative 225,811 square feet of absorption. New spaces were introduced to the market during the quarter, and there were also several new big deals. However, the asking rate reached a historical high in Silicon Valley of $1.49/SF, increasing by $0.19/SF from the second quarter. This is a rebound from the first two quarters of the year, which saw the first two decreases in asking rates since 2016.

The third quarter marked a huge turnaround for the Silicon Valley warehouse market, which posted its first positive absorption since the third quarter of 2018, as net absorption totaled 776,325 square feet. This decrease in availability occurred while the asking rate rose by $0.02/SF from the second quarter to $0.98/SF and new properties were introduced to the market, leading to the highest gross absorption in five years with 1,665,271 square feet.

 

Silicon Valley R&D Market

Average NNN Asking Rent (Price/SF)       $2.20
Availability Rate (%)       10.2%
Net Absorption (SF)  -888,988

The Silicon Valley R&D market saw a slow third quarter, posting a lower net absorption number than it has in the last few years with negative 888,988 square feet. A handful of large new availabilities and a slight decrease in leasing velocity made for a quarter with higher availability rates and lower absorption. While the net absorption number was lower than it has been in the past, there was still over 2 million square feet leased in Silicon Valley this quarter. Despite the high amount of fluctuation in asking rates in the individual submarkets, the overall asking rate held relatively steady, falling only $0.03/SF to $2.20/SF.



Silicon Valley Office Market Report
3Q19
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Silicon Valley R&D Market Report
3Q19
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Silicon Valley Industrial Market Report
3Q19
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