Quarterly Report

Silicon Valley Commercial Space

Q1 2018

The region continues to develop a significant amount of new commercial space to accommodate economic expansion, with more new space constructed since the beginning of 2015 than during the previous 13 years combined. However, despite the addition of new space, consolidation and rightsizing by some of Silicon Valley’s dominant tenants have led to a rise in office space vacancy in the first quarter of 2018 – reaching a rate not experienced since mid-2012. But while overall vacancy rates rose, several submarkets held steady; additionally, a surge in leasing activity indicates that the vacancy rate is expected to come back down. While office space rental rates in prime submarkets continued to increase in Q1, regional averages have been pulled down by older, less desirable inventory.

Charts/tables featured in this report: