Silicon Valley Office Vacancy

Silicon Valley Office Vacancy Rises To 19.6%

USA – Data from the research divisions of Jones Lang LaSalle (JLL) and Joint Venture Silicon Valley showed that the office vacancy level in Silicon Valley climbed to 19.6 percent at the end of Q3 2023 from 18.1 percent in the prior quarter and 17.6 percent in Q3 2022, reported the San Jose Spotlight on Wednesday (20 December, SGT).

While Silicon Valley’s office vacancy rate surpassed New York City’s 16.5 percent and Washington DC’s 19.1 percent, it remains lower than Boston’s 19.8 percent, Austin’s 21.3 percent, and San Francisco 30.4 percent.

For the research divisions, Silicon Valley encompasses all of San Mateo and Santa Clara counties, in addition to the cities of Newark and Fremont in Alameda County.

The growth in the region’s office vacancy in Q3 2023 didn’t come as a surprise, said Ricky Manago, a researcher at Joint Venture Silicon Valley’s research division Silicon Valley Institute for Regional Studies. Still, it took a little longer for Silicon Valley to see a more rapid increase in office vacancy than other markets.

However, commercial property leasing transactions in Silicon Valley were slower during the third quarter as compared to 2022 and could be poised to end the year with the 2nd lowest rental volumes since 2017.

For the whole of Q3 2023, there were 781 commercial leasing deals, down 39 percent from the 1,276 recorded in 2022 and 12 percent lower than the 882 seen in 2021.

In particular, commercial real estate leasing in San Mateo County by square footage was roughly 50 percent of the overall figure registered in 2022, while that in Santa Clara County was merely 64 percent of last year’s total.

“The remote-friendly tech worker environment has changed the math on how much space companies need and what they will need in the future,” added JLL Northern California’s Research Director Alexander Quinn.

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