It’s been said that “numbers never lie.” So while we may feel like our day-to-day work keeps our finger on the pulse of the Northern California commercial real estate market, it’s always good to look at the numbers and see what’s real.
So every month we scour the data in each of the regions NAI Northern California covers and determine the health of our primary markets in office, retail, industrial and multifamily properties. We check four indicators in each asset class:
- Current Inventory
- Under Construction
- 12-Month Net Absorption
- Vacancy Rate
Here below is our November 2019 report for the South Bay, which we’ve also compiled into an eye-friendly infographic. Follow our blog, social media feeds, or subscribe to our newsletter for monthly updates to this data, and for our companion reports on San Francisco, the East Bay, and the North Bay.
Office Properties: This month, the South Bay office market’s inventory is slightly up from October at 131 million sq. ft. and expected to continue to rise. Approximately 6.8 million sq. ft. are under construction, way down from October, but this figure is trending upward. The 12-month net absorption rate is down to 2.7 million sq. ft. of office space, with an inconsistent pattern the last few months and projected to reverse again into an increase. The vacancy rate is at 8.6 percent, half a percent up from October and expected to drop.
Industrial Properties: For the industrial market, 197 million sq. ft. of space is in the inventory, the same as the last few months, but this figure is expected to increase any day now. The space under construction is also projected to rise, at 995,000 sq. ft. (way up from August, September, and October). The 12-month net absorption took a sharp dip, at 316,000 sq. ft., but is on an upward trajectory. The vacancy rate is slightly higher than in September and October, at 6.1%, but is expected to go back on the decline.
Retail Properties: There are 79.8 million sq. ft. of retail space available, barely up from last month. The space under construction is also marginally up over the last three months, at 1.2 million sq. ft., and is expected to increase despite the holiday season. The 12-month net absorption rate shot from -12,000 sq. ft. in October to 53,000 this month. Vacancy rates are just slightly down at 3.3% and projected to continue to decline.
Multifamily Properties: The multifamily market is holding strong at 146,000 units available in the inventory, slightly more than last month and the month before. Construction is at 9,500 units and expected to continue to increase. The 12-month net absorption rate is 2,600 units, marginally up from the last few months and projected to continue to rise. The vacancy rate is at 4.9%, slightly up from October, but is projected to decline.
The South Bay market stretches from Palo Alto down through Mountain View, San Jose, Morgan Hill, Gilroy, Hollister, and southeast through the mountains. For more detailed updates or to find out how the South Bay’s submarkets are doing, contact one of our advisors. Whether you’re interested in office, industrial, retail, or multifamily properties, we can help.
Data source: Costar Analytics