Q3 2025 Silicon Valley Office Occupier's Report
The Silicon Valley office market sustained its momentum into the second half of the year, marking the second consecutive quarter of declining vacancy, which fell to 17.2%. The vacancy rate has remained largely stable since Q1 2024, rising up by just 0.1% over that period. Availability also improved, down 0.8% quarter-over-quarter (QoQ) and 1.2% year-over-year (YoY). The Silicon Valley average asking rate trended down $0.13 psf to $4.90 psf, while the Mid-Peninsula region (Redwood City, Menlo Park, San Mateo) saw a 1.5% increase from $5.54 psf to $5.63 psf. Net absorption remained positive for the quarter with 267K SF of absorption.
Leasing activity continues to trend upward, with AI and Technology firms as the primary driver of demand, while making several significant commitments in the third quarter. Netflix renewed its 547K SF campus lease in Los Gatos, while Databricks expanded by 305K SF in Sunnyvale. Other commitments included transactions from CrowdStrike, Otter.ai, Landing AI, and Etched.ai.
Leasing activity continues to trend upward, with AI and Technology firms as the primary driver of demand, while making several significant commitments in the third quarter. Netflix renewed its 547K SF campus lease in Los Gatos, while Databricks expanded by 305K SF in Sunnyvale. Other commitments included transactions from CrowdStrike, Otter.ai, Landing AI, and Etched.ai.