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Office Vacancies Rise in Silicon Valley, Yet Rents Hold Steady
Office vacancies in Silicon Valley rose during the second quarter, according to new reports from three major services firms. Cushman & Wakefield put Q2 vacancy at 21.6% with a high of 42% for the San Jose Airport area and a low of 5% for Cupertino. This topline figure was consistent with Kidder Mathews’, while CBRE put it at 18% with total availability at 20.4%.
Much of the vacancy, said CBRE, can be attributed to “a plethora of large tech users marketing underutilized space for sublease.” According to Kidder Mathews’ report, “economic uncertainty in the tech industry” contributed to gross absorption declining from 2.0 million square feet in Q2 2022 to 427,600 square feet in Q2 of this year.
Yet, Kidder Mathews offered a positive outlook, buoyed by the AI boom in Silicon Valley and noting that asking rents remain stable. “Although the poor economy has slowed transactions, Silicon Valley remains the leading tech hub, and despite an increase in supply of available spaces, landlords and owners believe the demand is still high enough to justify keeping prices at current levels.”
- ◦Lease
