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Silicon Valley Market Reports

Silicon Valley Office Market

Average FS Asking Rent (Price/SF)     
    $4.25
Availability Rate (%)     10.0%
Net Absorption (SF) 122,344

Coming off one of the strongest years in recent history, the Silicon Valley office market experienced a slower start to 2019 in comparison but still posted strong numbers with positive net absorption for the sixth straight quarter of 122,344 square feet. However, there was an uptick in investment sales this quarter. The strong leasing in the area has clearly signaled to buyers that there is business to be done in Silicon Valley. Nevertheless, with no new construction coming to market and leases closing at a slower rate, the market remained relatively flat to start the year. Vacancy was unchanged at 10.0%, while average asking rates climbed by $0.08/SF to $4.25/SF, erasing the drop-off from last quarter.

Silicon Valley Industrial/Warehouse Market

Industrial

Average NNN Asking Rent (Price/SF)      
      $1.44 
Availability Rate (%)         2.9%
Net Absorption (SF) -384,192

Warehouse

Average NNN Asking Rent (Price/SF)            $.95
Availability Rate (%)           8.2%
Net Absorption (SF)   -884,034

The Silicon Valley Industrial market saw a slow start to the year with 384,192 negative square feet of net absorption in the first quarter of 2019. This was largely due to nearly 300,000 square feet of space coming available in Fremont this quarter, over half of which came from the Pacific Commons South Development in the Bayside submarket. This pushed vacancy up 0.6 percentage points to 2.9% overall. Asking rates dropped for the first time in nine quarters, decreasing $0.13/SF to $1.44/SF.


The warehouse market posted yet another quarter of negative net absorption with 884,034 negative square feet. This was due to a number of large spaces coming to market, predominantly in Fremont and Newark. Despite this, plenty of large renewals were signed throughout the market. Without much in the way of new leasing, vacancy climbed 2.4 percentage points to 8.2% overall. Asking rates dropped slightly by $0.04/SF to $0.95/SF on average.

Silicon Valley R&D Market

Average NNN Asking Rent (Price/SF)       $2.22
Availability Rate (%)         9.7%
Net Absorption (SF)  -271,841

After a large spike in net absorption in the last quarter of 2018, the Silicon Valley R&D market returned to negative territory in the first quarter of 2019, with a total of negative 271,841 square feet. Although a large number of mid-sized deals brought the quarter's gross absorption to almost 2.5 million square feet, they could not offset a few larger listings that came onto the market. Despite negative absorption, the overall availability rate remained unchanged from last quarter at 9.7%, and the average asking rate jumped $0.05/SF to $2.22/SF.



Silicon Valley Office Market Report
1Q19
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Silicon Valley R&D Market Report
1Q19
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Silicon Valley Industrial Market Report
1Q19
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