Silicon Valley Most Resilient Office Market In The US
USA – Despite the severe effects of the COVID-19 pandemic, California’s Silicon Valley is considered as the most stalwart office leasing market in the United States, reported The Mercury News on Monday afternoon (26 October).
According to property consultancy CBRE’s Tech 30 study that was published on Monday, Silicon Valley has one of the brightest outlooks among the largest tech hubs in the country.
In fact, office rents in the area rose by 11.6 percent in June 2020 compared to the same period 2 years ago. The increase represents the 4th highest rental growth among the tech hubs surveyed by CBRE. And the rental increase is attributed to the strong leasing demand by tech firms.
“The tech industry has played a vital role in helping society and business adapt and sustain through this pandemic. Many of these firms are based in Silicon Valley and have been some of the best performers on the stock market, given their business prospects,” said Colin Yasukochi, CBRE’s Executive Director for its tech insights department.
Yasukochi pointed out that major tech firms account for the biggest office space occupants in Silicon Valley, providing a great foundation for the office market’s resilience and growth in the future.
For instance, Silicon Valley’s Mountain View, where search giant Google’s headquarters is located has a low vacancy rate of only 3.2 percent. This is the second lowest vacancy level among the tech hubs surveyed that is bested only by Seattle’s South Lake Union district.
In addition, Google has been adding a significant amount of office space via leases and acquisitions, and such tech firms are expected to be a major driver of office space demand once the virus outbreak has been surmounted.
“The tech industry was indispensable in enabling continued business activity during the COVID-19 shutdown. It will likely lead the next growth cycle by accelerating the digital transformation of the economy,” added CBRE in the report.
Other major tech hubs surveyed by CBRE include Boston, Seattle, San Diego, Los Angeles, San Francisco, and New York City.