Northern California Office Market Report
|Average Asking Rent (Price/SF)||$4.69|
|Net Absorption (SF)||-5,714,034|
As a result of the inactivity of the COVID-19 pandemic, the Northern California office market posted 5.7 million square feet of negative absorption, of which more than 50% is attributed to San Francisco alone. The shelter-in-place orders throughout California have caused a surplus of sublease space to hit the market, increasing the market’s availability rate to 12.3%. Still, asking rents continue to rise. Overall average asking rent increased $0.11 to $4.69/SF and Class A average asking rent increased $0.08 to $5.40/SF. This lag has been observed during previous recessions and asking rents are expected to drop in upcoming months. New construction is strong and proposals for new projects are still being submitted.
Bay Area Life Science Market Report
| Availability Rate (%)||7.1%|
|Net Absorption (SF)||-253,066|
Throughout a quarter that decimated many sectors throughout the Bay Area because of the pandemic and the ensuing national recession, the life science market showed resilience with stable market activity and steady rents. Market-wide availability rose to 7.1% vacancy this quarter, up from 5.7% in the previous quarter and up from 3.9% one year ago. The rise in vacancy and loss of net absorption totaling negative 253,066 square feet this quarter was largely driven by 228,167 square feet becoming available at the Alexandria District for Science & Technology project in San Carlos, which is scheduled for delivery in early 2021. Deal activity picked up this quarter, as there were twelve leases greater than 20,000 square feet executed this quarter, compared with three in the previous quarter. Life science has become a true staple in the Bay Area market, specifically in the North Peninsula, where South San Francisco continues to be the premier R&D catalyst throughout the region. Unlike the office sector, where a work-from-home scenario is a viable substitute to working from an office, growth in research and development cannot be truly achieved from a remote work environment. Expect the emergence of COVID-19 and its lingering effects on the economy to accelerate the life science sector, as demand for wet lab and R&D commercial facilities is amplified in the second half of 2020.Download Bay Area Life Science Market Report 2Q20