Q4 2019 Silicon Valley Market Report - Research and Development

Continuing with Q3’s trend of R&D slowdown, Q4 had 119,424 square feet of negative net absorption. Although many large deals brought the gross absorption rate up substantially, Inphi’s 110,562 square feet and Stryker’s 122,092 square feet transactions, to name a few, it wasn’t enough to offset the amount of vacancy and subleasing spaces. Asking rates increased from $2.26 to $2.32/SF from the previous quarter due to the higher demand from premium R&D space. Throughout 2019, there has minimal activity in regards to new product being developed. With companies competing for R&D space that meets their financial needs, we see no sign of any slow down in leasing in 2020.