North Peninsula Office Market
| Average FS Asking Rent (Price/SF) | $5.96 |
| Availability Rate(%) | 11.9% |
| Net Absorption (SF) | -896,553 |
The second quarter of 2020 for the North Peninsula office market showed signs of vacancy and rental rates trending up, construction and deliveries staying neutral and absorption trending down. Despite softening tenant demand and rising vacancy in the North Peninsula, average asking rates were recorded at $5.61/SF full service, up from $5.53/SF in the prior quarter. The average Class A rate was recorded at $5.96/SF, up from $5.90/SF in the previous quarter but down from $6.00/SF one year ago. Overall vacancy was recorded at 11.9% this quarter, up from 10.2% in the previous quarter. On the sublease front, vacancy counted for 3.1% of the total inventory and 24.9% of the total vacancy. The construction pipeline currently holds approximately 4.0 million square feet awaiting completion, with 1.1 million square feet expected to deliver next quarter; however, no new deliveries were reported this quarter. At the end of the last quarter, the San Francisco Bay Area was in the initial stages of Governor Gavin Newsom’s stay-at-home mandate as a result of the COVID-19 pandemic. Now at the end of the second quarter, signs of the economic shutdowns throughout the region as a result of the pandemic can be seen.
Download North Peninsula Office Market 2Q20North Peninsula Industrial Market
| Average NNN Asking Rent (Price/SF) | $2.84 |
| Availability Rate (%) | 5.4% |
| Net Absorption (SF) | 123,800 |
The North Peninsula R&D market ended the first quarter of 2020 with an overall vacancy of 6.5%, down from 6.8% in the previous quarter. The market’s average asking rate is currently $4.36/SF NNN, down from $4.52/SF in the prior quarter. The R&D leasing market waned this quarter, recording 480,665 square feet of gross absorption, compared with 963,791 square feet in the previous quarter. The North Peninsula industrial market closed the quarter with an overall vacancy of 4.7%, up from 4.3% in the previous quarter. The North Peninsula recorded a seventh consecutive quarter of negative absorption, closing at 133,589 square feet. Overall rental rates decreased this quarter to $1.61/SF NNN, down from $1.65/SF in the previous quarter but up from $1.58/SF one year ago. As the COVID-19 pandemic increases its presence throughout the Bay Area, landlords and tenants have lingering concerns on both the short- and long-term ramifications on the markets.
Download North Peninsula Industrial Market 1Q20