Quarterly Report

Silicon Valley Commercial Space

Status of Commercial Space One Year Into the COVID-19 Pandemic

Q1 2021

Commercial leasing activity in Silicon Valley was slow during the first quarter of 2021, with fewer than 100 transactions in total. A handful of large commercial buildings were completed despite the slowdown of region development overall since the start of the pandemic, and an impressive 15 million square feet remains in-progress. The quarter also marked the first notable rise in asking rents for industrial, lab, and R&D space. Vacancy rates for office and R&D space rose as well, likely as a result of continued pandemic-related telework and uncertainty. In contrast, industrial space vacancy rates remained relatively stable—bolstered by increases in online spending and the need for goods warehousing/delivery. Additionally, the recent boost in mobility companies going public through Special Purpose Acquisition Company mergers along with an infusion of venture capital are creating demand for advanced manufacturing space.