Welcome to the NAI Northern California’s “Market Pulse” feature. We checked the pulse of the South Bay commercial real estate market to discover the ups and downs of the office, industrial, retail, and multifamily markets. Each market has four dimensions: current inventory, under construction, 12-month net absorption, and vacancy rate.
Check out our September 2019 South Bay Market Pulse infographic. If a dimension is on the rise, the pulse goes above the baseline; if it’s on the decline or negative, the pulse will dip below the baseline.
This month the South Bay office market’s inventory is up 1 million sq. ft. from last month to 130 million sq. ft. and continues to rise. Approximately 5.6 million sq. ft. are under construction, slightly down from August but trending upward. The 12-month net absorption rate is the same as last month at 2.7 million sq. ft. of office space. The vacancy rate is at 8.4 percent and dropping.
For the industrial market, 197 million sq. ft. of space is in the inventory and rising. The space under construction is also rising, at 771,000 sq. ft. (the same as last month). The 12-month net absorption is way up from August, at 1 million sq. ft., formerly 844,000 square feet. The vacancy rate hasn’t changed, at 5.7%, but is trending downward.
There are 79.8 million sq. ft. of retail space available and dropping. The space under construction is the same as last month, at 1 million sq. ft., but expected to decline. The 12-month net absorption rate last month was 78,000 sq. ft. and has dropped dramatically to -7,000 square feet. Vacancy rates are slightly up from last month, at 3.4%, but trending downward.
The multifamily market is holding strong at 144,000 units available in the inventory, the same as last month. Construction is way up from last month, from 1,000 units to 9,700 units. The 12-month net absorption rate is 2,600 units and rising steadily. The vacancy rate is at 4.3%, no change from last month, but expected to drop.
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