Q4 2024 Silicon Valley R&D Report
After showing initial resilience at the onset of the pandemic, the R&D sector has faced challenges over the past two years. Encouragingly, for the first time in seven quarters, the sector posted positive net absorption. However, YTD net absorption remains negative at 954K SF, a slight improvement from 2023’s negative 967K SF but significantly short of 2022’s positive 2.9M SF. The vacancy rate remained flat QoQ at 9.2%, although it has increased 1.8%, YoY. Meanwhile, availability recorded a 0.5% decrease from Q3 2024. Despite asking rents remaining flat at $2.84 QoQ, on a YoY basis rates have fallen by 5.8%.
The Silicon Valley R&D sector is steadily regaining momentum after several challenging quarters. A key highlight is the U.S. Department of Commerce’s selection of Sunnyvale as the site for a second flagship R&D facility under the CHIPS and Science Act. Not only is the government investing in the Bay Area, but venture capital funding has also seen a significant increase compared to 2023. Despite these funding developments, the sector continues to face significant hurdles, including unpredictable supply chain costs and extended lead times.
The Silicon Valley R&D sector is steadily regaining momentum after several challenging quarters. A key highlight is the U.S. Department of Commerce’s selection of Sunnyvale as the site for a second flagship R&D facility under the CHIPS and Science Act. Not only is the government investing in the Bay Area, but venture capital funding has also seen a significant increase compared to 2023. Despite these funding developments, the sector continues to face significant hurdles, including unpredictable supply chain costs and extended lead times.