The Silicon Valley office market continues to perform well, with tech tenants quickly grabbing up space, particularly larger blocks that are hard to come by in the tight market.
The recent 274K SF lease by Roku at Coleman Highline reflects the strength of the San Jose market. Google’s plans for an 8M SF campus in San Jose have driven a lot of activity in that city’s downtown.
But even beyond a bustling San Jose, the greater Silicon Valley office market has had strong fundamentals for the first half of the year, according to Savills Studley.
In Q2, there was more than 2.6M SF of office leased in Silicon Valley, adding up to 5.8M SF leased in the past 12 months, Savills Studley reports. Availability in the core markets of Menlo Park, Palo Alto and Sunnyvale/Cupertino remains in the single digits, while the region’s overall availability has decreased to 15.8%, down 130 basis points from a year ago.
At the same time, rents are rising, reaching $50.94 overall asking rent for the region in Q2, up 4%. Class-A rents were up 1.7% to $52.51. Tech tenants continue to drive the market.