Q1 2024: Silicon Valley Office Market Report

The Silicon Valley office market had a modest start to the year. Vacancy stayed relatively flat quarter-over-quarter, increasing 0.3% to 17.1%, though vacancy has increased 3.1% since Q1 2023. Similarly, asking rates also remained flat quarter-over-quarter, declining only $0.05/RSF to $5.26/RSF, since Q1 2023 rates have fallen $0.68/RSF. Notably, the Silicon Valley office market saw positive net absorption in Q1 of 400K SF. This growth was largely fueled by Google’s completion and occupancy of the 1.3M SF Caribbean Campus in Sunnyvale.

Like many regions, the Silicon Valley office market has been struggling to stabilize post-pandemic. The San Francisco Bay tech sector, still reeling from 76K layoffs in 2023 and an additional 4K at the outset of 2024, faces challenges in revitalizing office occupancy. A recovery will hinge not only on effective strategies to bring employees back to the office but also on favorable shifts in interest rates that could stimulate activity in the capital markets.