South Peninsula Office Market Report
Net absorption in the first quarter of 2024 measured negative 72,650 SF, the eighth consecutive quarter of negative net absorption. Following a year that saw a total of 3.1 million SF of occupancy losses, the quarterly net absorption figure is comparatively low and is the highest net absorption figure measured since the first quarter of 2022. The overall vacancy rate is currently 22.0% in the region, up from 15.4% in the first quarter of 2023 and at its highest level since the first quarter of 2004. Asking lease rates fell again this quarter to $7.55/SF, and are down 1.2% quarter-over-quarter and 8.2% year-over-year. The lack of tech leasing and high levels of availability have caused asking lease rates to slowly fall over the past four quarters.
Download South Peninsula Office Market Report 1Q24South Peninsula R&D Market Report
Net absorption in the first quarter of 2024 was relatively flat, posting just ± 10,077 square feet of quarter of occupancy losses, causing the vacancy rate to rise to 15.7%. Comparatively, this is a relatively quiet quarter following a year when 1.4 million square feet was vacated in the South Peninsula R&D market, causing vacancy to rise from 9.9% to 15.5% in a single year. The construction pipeline totals ±1.1 million square feet following the completion of 3150 Bay Road in Redwood City, a ±31,170 square foot life science conversion. Rents fell 3.2% quarter over quarter from $5.28 to $5.11 after holding at the same level for the previous three quarters. Although R&D space in the region has always commanded high rents owing to the presence of high-quality R&D space and life science users, that number could fall as market fundamentals soften.
Download South Peninsula R&D Market Report 1Q24