August 22, 2017 – Silicon Valley’s commercial office vacancy rates are up over the past three quarters despite high demand for large office space, the Silicon Valley Institute for Regional Studies reported today.
The Institute’s latest quarterly commercial real estate report, prepared in partnership with JLL Silicon Valley, shows that only a handful of companies, including BlueCoat, Ericsson and Cisco, accounted for the majority of the occupancy losses since last October.
While no new office buildings were completed in the most recent quarter, 11 million square feet of new commercial space is in the pipeline. More commercial space was under construction in Silicon Valley in Q2 2017 than in any single quarter since Q4 2000.
Five commercial buildings – one R&D and four industrial buildings – were completed in the most recent quarter, totaling 817,000 square feet. That brought the total completed for 2017 to 1.9 million square feet.
Silicon Valley office vacancy rates had been declining for six straight years since the 2010 peak of 24%, but rose in the first half of this year to nearly 14%. The bulk of the market’s vacancy is concentrated in Santa Clara along the Great America Parkway corridor and North San Jose.
The Institute also reported that with rising vacancy rates, average asking rents for office and R&D space declined over the past year, down 8% and 14% respectively.
About the Silicon Valley Institute for Regional Studies
The Silicon Valley Institute for Regional Studies provides research and analysis on a host of issues facing Silicon Valley’s economy and society. The Institute is housed within Joint Venture Silicon Valley. For more information, visit www.siliconvalleyindicators.org.
About Joint Venture Silicon Valley
Established in 1993, Joint Venture provides analysis and action on issues affecting the Silicon Valley economy and quality of life. The organization brings together established and emerging leaders—from business, government, academia, labor and the broader community—to spotlight issues, launch projects and work toward innovative solutions. For more information, visit www.jointventure.org.
About JLL Silicon Valley
JLL is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com/silicon-valley.