South Peninsula Office Market Report
| Average NNN Asking Rent (Price/SF) | $5.68 |
| Availability Rate (%) | 12.0% |
| Net Absorption (SF) | 500,539 |
The South Peninsula office market finishes the year with a rebound in gross absorption and stable average asking rents. Absorption levels are still off the latest cycle’s average by 50.0%. Large block leases from Waymo, Ascendis Pharma and Rivian Automotive increased leasing activity by five times over the previous quarter. There is some concern over the outmigration of some large corporate technology companies, with recent announcements from Oracle, Tesla and HPE about moving headquarters out of California. The announcements are largely tax-related and headline-grabbers, while the presence and occupancy of these companies will be little changed. The impact could slow growth for these companies in the years to come but also alleviate some barriers to entry for younger and mid-cap tech companies. Barriers to entry include supply constraints, high living and CRE costs and a tight labor market.
Download South Peninsula Office Market Report 4Q20South Peninsula R&D Market Report
| Average NNN Asking Rent (Price/SF) | $4.76 |
| Availability Rate (%) | 9.3% |
| Net Absorption (SF) | -143,595 |
The South Peninsula R&D market continues to be buoyed by life science activity, which makes up over 50% of this quarter’s completed transactions over 5,000 square feet. R&D users have less capability to work in a distributed fashion, and it bodes well for the market to see sustained demand throughout 2020 and beyond. The fourth quarter added approximately 810,000 square feet of R&D demand, mostly tenants in the life science sector.
Download South Peninsula R&D Market Report 4Q20