Q2 2019 Silicon Valley Office Report

Following a slow start to 2019, office activity has begun to pick up at the close of Q2. Due to extremely large deals being signed and minor amounts of available space coming onto the market, net absorption more than doubled from last quarter to 740,810 square feet. The vacancy rate dropped almost a full percent down to 9.3% as expected. As for rent, the asking rate per month remained flat despite the high volume of leasing activity. This is due to the large amount of sublease space that continues to represent a significant portion of total availability in the market, which in turn forces direct space to compete with discounted sublease rents.