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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 (%)        3.6%
Net Absorption (SF) -153,931


Average NNN Asking Rent (Price/SF)           $.96
Availability Rate (%)          7.3%
Net Absorption (SF)    236,610


Milpitas had a very strong quarter, with a net absorption of 360,457 square feet. However, this was the lone bright spot, as Mountain View and Campbell were the only other submarkets to post positive net absorption totals, and these were les than 5,000 square feet. San Jose had its lowest net absorption since the second quarter of 2017, with negative 380,557 square feet. This was largely because of two new developments in central San Jos that finished construction, adding more than 300,000 square feet to the available space.

Building on a strong third quarter, Fremont was the only submarket to post positive net absorption in the fourth quarter. A solid showing of 244,190 square feet was enough to keep the entire market in the black. Most asking rates were essentially unchanged from the third quarter, although the Santa Clara submarket saw its average rate drop down almost thirty cents, to $0.94. Vacancy were unchanged this quarter, for all markets except for Fremont, which saw a decrease of 1.2 basis points over to quarter to 7.4%


Silicon Valley R&D Market

Average NNN Asking Rent (Price/SF)       $2.16
Availability Rate (%)       10.1%
Net Absorption (SF)  -127,292

The Silicon Valley R&D market closed out 2019 with its strongest quarter of the year in terms of both net and gross absorption. The improvement in net absorption was particularly impressive, from negative 888,988 square feet in the third quarter to negative 127,292 square feet in the fourth quarter. While absorption numbers strengthened, the average asking rate and availability rate both remained relatively stable. The asking rate in Silicon Valley fell $0.04/SF to $2.16/SF, and the availability rate fell 0.03 percentage points to 10.13%. Although net absorption stayed slightly negative due to a high volume of new medium-sized listings, the uptick in overall leasing velocity is a strong sign for the R&D market going into 2020.

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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