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Silicon Valley Market Reports

Silicon Valley Office Market

Average FS Asking Rent (Price/SF)     
Availability Rate (%)        12.2%
Net Absorption (SF)    572,596

In the third quarter of 2018 the Silicon Valley office market couldn't quite match the productivity of the previous quarter. However, leasing activity remained strong as we also saw investment activity begin to pick up. As large tech companies continue to look for blocks of space throughout the South Bay, investors are seeing large office developments increase in value. As a result, despite some decline, net absorption remained in positive territory for a fourth straight quarter at 572,596 square feet, driven largely by strong activity in the San Jose Class A market. This brings year-to-date net absorption to positive 2,287,682 square feet. Availability throughout the South Bay increased by 0.2 percentage points to 12.2% overall, while average asking rates bounced back, increasing by $0.13/SF to $4.25/SF.

Silicon Valley Industrial/Warehouse Market


Average NNN Asking Rent (Price/SF)      
Availability Rate (%)          3.1%
Net Absorption (SF)   -166,075


Average NNN Asking Rent (Price/SF)            $.98
Availability Rate (%)            3.5%
Net Absorption (SF)       85,430

The Silicon Valley Industrial market experienced a slow third quarter in 2018, falling back into negative net absorption after two strong positive quarters. The lack of available space is becoming more evident as the market tightens. However, availability ticked up slightly to 3.1% during the third quarter, and with projects such as Pacific Commons in Fremont, Gateway 84 in Newark and McCarthy Creekside in Milpitas set to deliver product within the next year, activity is likely to pick up. Average asking rates increased yet again to $1.31/SF, marking the seventh straight quarter of rent growth.

The Silicon Valley warehouse market saw increased activity in third-quarter 2018, with net absorption increasing to positive 85,430 square feet. Availability declined somewhat, falling 0.3 percentage points to 3.5% overall. Despite the tightening of the market, multiple large warehouse projects are set to hit the market at the beginning of 2019, including the 814,852-square-foot Pacific Commons Industrial Center in Fremont and the four-building Morton Commerce Center in Newark.

Silicon Valley R&D Market

Average NNN Asking Rent (Price/SF)       $2.10
Availability Rate (%)         2.2%
Net Absorption (SF)  -166,075

After almost breaking into positive territory in the second quarter of 2018, the Silicon Valley R&D market slowed in the third quarter, posting 166,075 negative square feet of net absorption. This was because several large lease listings came onto the market, including a 172,405-square-foot sublease in San Jose and a 102,668-square-foot lease in Milpitas. Gross absorption maintained high levels across the market, totaling 3,040,878 square feet, but this leasing activity was not enough to counteract the negative movers.

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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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