Q2 2023 Silicon Valley Office Occupiers Guide
The second quarter of 2023 saw continuing declines in demand for office space. The increases in vacancy and availability rates resulted in a net absorption of negative 2.3 million SF this quarter and negative 3.2 million SF this year. Total vacancy rates rose to 15.2% in Q2 2023, up from 13.1% in Q4 2022. During the same period, the total availability rate grew to 19.9% from 17.3%. Direct vacancy rates grew only 30 basis points since Q4 2022, meaning gains in total vacancy and availability rates were due to the increase in sublease listings.
Available sublease space jumped to 11.2 million SF by the end of this quarter, a sharp increase compared to 7 million SF of sublease space available at the beginning of 2023. Nearly two-thirds of the new sublease inventory was added by Meta and Google. Last quarter, Meta added 1.4 million SF of sublease space in Silicon Valley. Google listed another 1.4 million SF of sublease inventory this quarter.