Quarterly Report

Silicon Valley Commercial Space

Q1 2019

Significant tenant demand in Q1 2019 drove Silicon Valley office space vacancy rates down, even as new supply continued to hit the market. Demand also supported high asking rents, especially at locations near public transit. Meanwhile, a remarkably large amount of new Silicon Valley commercial space was under construction during the quarter, with in-progress development at an 18-year high of more than 12 million square feet. Vacancy rates are expected to increase somewhat as the developments currently underway are completed. And while a large share of recently completed commercial space was preleased, the presence of some speculative development in-progress will open up the market to other prospective tenants.