Tuesday, February 4, 2014

Downtown San Jose Office Vacancy Falls Below 20%

After several years of 20%+ vacancy in the Downtown office submarket we have finally broken that barrier. In the 4th quarter of 2013, vacancy dropped from 20.9% to 19.5%. The total amount of office space Downtown is 8.4 million SQFT and the average rents are around $2.74, far below most parts of Silicon Valley.

The notable 2013 leases mentioned in the Silicon Valley Business Journal article are:
  • Apigee (moved from Palo Alto) - 41,000 SQFT @ 10 Almaden
  • Bridge Bank - 18,500 SQFT expansion @ 55 Almaden
  • Miller Morton - 15,000 SQFT @ 50 West San Fernando
  • CiperCloud - 20,000 SQFT @ 333 West San Carlos

While 19.5% is still quite high--especially compared to Palo Alto and Mountain View--the trend is very positive. The previous quarter also saw a 1% drop in vacancies. With more residential towers on the way and a booming restaurant scene, I fully expect vacancies to continue to decrease. Downtown San Jose is perhaps Silicon Valley's best kept secret regarding office space. Rates are low, the area is easily walkable with great access to mass transit, easy access to the airport, hundreds of restaurants and bars, a renovated convention center, tons of hotels, the SAP center, and now we even have a patent office.

Source: SVBJ


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