Q3 2024 Silicon Valley R&D Report

In Q3, the Silicon Valley R&D market remained stable. The vacancy rate increased by 0.5% during the quarter, with the Fremont/Newark and Sunnyvale submarkets contributing 570K SF of vacant space. However, YoY, vacancy  increased slightly by 1.7%. Despite a slow increase in vacancy, asking rates held steady YoY, marginally falling $0.02 to $2.87. YTD, the R&D market has recorded 480K SF of negative net absorption, marking the seventh consecutive quarter of negative net absorption, totaling 1.9M SF during that period.

After cementing its commitment to Silicon Valley by announcing it eventually plans to move forward with its massive campus project in Downtown San Jose, Google has filed a proposal to transform 5079 Disk Drive in San Jose into a cutting-edge R&D facility. The proposed facility would look to specialize in various labs including testing rack, thermal, and mechanical labs. In conjunction with Google, other large industry players like Applied Materials, Klein Investments, and Prologis, have also made large investments in Silicon Valley demonstrating continued confidence in the region’s potential for innovation and growth.