Q1 2019 Silicon Valley Occupier's Guide - Research and Development
After a robust finish to 2018, the Silicon Valley R&D market started off a bit slowly in 2019, with 271,841 square feet of negative net absorption for Q1. Although a significant number of mid-sized deals brought the quarter’s gross absorption to almost 2.5 million square feet, they could not offset a number of large listings that came onto the market. The average asking rate rose from $2.18 to $2.54/sf in the span of 12 months which is not surprising due to the lack of R&D product coming online throughout the Bay Area. The 16.5% rental rate increase is substantial and reflects a 9.8% vacancy rate which is expected to remain consistent over the next few quarters.