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Silicon Valley Market Reports

Silicon Valley Office Market

Average FS Asking Rent (Price/SF)     
Availability Rate (%)        9.2%
Net Absorption (SF) -350,574

After another strong year, Silicon Valley's office market slowed somewhat in the last quarter of 2019. The market posted a net absorption of negative 350,574 square feet, its first negative absorption number since the third quarter of 2017. Although the overall availability rate rose very slightly by 0.2 percentage points to 9.24%, it was still 0.78 percentage points lower than the availability rate was at the same time last year. New Class A availabilities with higher asking rates coming to the market, specifically in Santa Clara and Sunnyvale, bumped up the average Class A asking rate by $0.31/SF to $4.92/SF. This also pushed the overall asking rate to a record high $4.54/SF.

Silicon Valley Industrial/Warehouse Market


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


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
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Silicon Valley R&D Market Report
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Silicon Valley Industrial Market Report
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