Q1 2019 Silicon Valley Occupier's Guide - Office

With 2018 representing one of Silicon Valley’s strongest years in recent history, the office market experienced a more moderate start to 2019. The market essentially remained flat for the quarter with negative net absorption of 304,981 square feet, and a vacancy rate of 10.1%. Despite a level market, landlords remained bullish and average asking rates Valley-wide increased to $3.78 Full Service/SF, continuing the upward trend from the 4th Quarter of 2018. Given the amount of tenant demand we are tracking in the market, we expect that vacancy rates will decrease throughout the remainder of 2019, and average asking rates will continue to increase as there is not enough space coming online to meet the tenant demand.