North Peninsula Office Market
Average FS Asking Rent (Price/SF) | $5.56 |
Availability Rate(%) | 14.2% |
Net Absorption (SF) | -570,556 |
In response to COVID-19, the North Peninsula office market posted large negative absorption numbers for the fourth consecutive quarter, recording negative 570,556 square feet of occupancy losses for the quarter. Tenant demand for the quarter remained steady at 2.27 million square feet, up slightly from 2.24 million in the previous quarter but down slightly from 2.38 million one year ago. Despite relatively stable demand, lack of deal activity and continued uncertainty in the market caused by the pandemic has put downward pressure on average asking rents and resulted in 2.45 million square feet of negative net absorption year-to-date, pushing overall vacancy up to 14.2%, which is up from 12.6% in the previous quarter. The North Peninsula average asking rate was recorded at $5.56/SF Full Service, down from $5.61/SF in the previous quarter, while average rates decreased or remained stagnant in ten out of the 12 major submarkets. The pandemic has upset the tenant dynamic, not only on the North Peninsula but the entire San Francisco Bay Area over the last 10 months. Demand for new space has substantially decreased as companies continue to reevaluate not only their needs for additional space but also the space they were already occupying. As a result, tenants have saturated the market with sublease.
Download North Peninsula Office Market 4Q20North Peninsula Industrial Market
Average NNN Asking Rent (Price/SF) | $2.86 |
Availability Rate (%) | 6.7% |
Net Absorption (SF) | -62,975 |
The North Peninsula industrial market took a step backwards to close out the year in the face of the ongoing pandemic. Total vacancy continued to increase in the fourth quarter of 2020, ending at 6.3%, up from 5.9% in the previous quarter, with sublease vacancy remaining stable at 0.9%. Net absorption for the quarter was recorded at negative 273,390 square feet, making this the 10th consecutive quarter of negative net. The market wide average asking rate decreased to $1.64/SF NNN this quarter, down from $1.75/SF in the previous quarter. The pandemic has upset the tenant dynamic, not only in the North Peninsula but the entire San Francisco Bay Area over the last 10 months. Demand for new space has substantially decreased as companies continue to reevaluate not only their needs for additional space but also the space they were already occupying. As a result, tenants have saturated the market with sublease availability due to downsizing and deal velocity has noticeably decreased, which consequently has caused downward pressure on average rents. The choppy waters in the industrial market are expected to smooth out in 2021, however, after months of being pummeled by the pandemic, with surges in logistics and the ecommerce industry being the main catalysts to drive the market.
Download North Peninsula Industrial Market 4Q20