Market Indicators
Relative to Prior Year
Vacancy
Q4 2022 (YoY)
Net Absorption
Office Rental Rate
R&D Rental Rate
Industrial/WSE Rental Rate
Q1 2023
Forecast
Key Takeaways |
Home Depot preleased 127,000 square feet of warehouse space at 1953 Concourse Drive, San Jose.
Tech giants Amazon and Meta announced they would lay off 10,000 and 11,000 employees, respectively.
Google Gibraltar completed construction in Sunnyvale, adding over 400,000 square feet to Google's Silicon Valley footprint.
In
R&D remains strong in the fourth quarter; rents increased to $2.93 NNN, vacancy tightened 40 basis points to 5.6%, and there was 66,293 square feet of expansion.
Warehouse leasing activity slowed to 146,122 square feet and vacancy decreased 30 basis points to 1.5% quarter-over-quarter.
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Silicon Valley Commercial Property Trends
Lease Transaction
Sales Transaction
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Steffen Kammerer
Regional Managing Director | Bay Area
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Research & Forecast Report
Silicon Valley
Q4 2022 Snapshot
The Silicon Valley commercial real estate market slowed at the close of 2022. Across all products, net absorption contracted by 77,515 square feet and gross absorption measured 3.6 million square feet of activity, nearly half the gross absorption recorded in Q4 2021. The fourth quarter saw widespread layoffs as many companies re-adjusted from the surge of hiring during Covid. Venture capital funding slowed due to high interest rates and economic uncertainty heading into 2023 but remains relatively high in comparison to pre-Covid funding. Development in the Valley remains strong, with 9.9 million square feet currently under construction and 76.0 million square feet of planned development.
Read on for an overview
Q4 2022
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Lease and Sales Transactions |
Q4 2022
Asking Rents Vs. Vacancy
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Full report coming soon
Office contracted 139,561 square feet in occupancy, but the vacancy rate and asking rents remained stable quarter-over-quarter, recording 11.0% and $5.30 FS, respectively.
Olympus Surgical Technologies America expanded into 129,000 square feet of R&D space in San Jose.
Industrial asking rents decreased $0.04 to $1.46 NNN quarter-over-quarter and recorded 12,378 square feet of occupancy loss.
Office asking rents rose to $5.30 FS and vacancy increased 10 basis points year-over-year to 10.5%.
Adobe Systems' 750,000 square foot office building in Downtown San Jose completed construction.
All FAB Precision Sheetmetal, Inc. leased nearly 133,000 square feet of industrial space in San Jose.
Market Report
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R&D recorded 1.2 million square feet in gross absorption, the measure of non-renewal leases and user-sale activity.
