Office vacancies in Silicon Valley rose during the second quarter of this year, according to reports from three major services firms. Cushman & Wakefield reported a vacancy rate of 21.6%, ranging from 42% for the San Jose Airport area to 5% for Cupertino. This figure was consistent with Kidder Mathews’ report, while CBRE put it at 18%, with total availability at 20.4%.
Much of the vacancy can be attributed to “a plethora of large tech users marketing underutilized space for sublease”, said CBRE. Additionally, Kidder Mathews noted that economic uncertainty in the tech industry had contributed to gross absorption declining from 2 million square feet in Q2 2022 down 427,600 square feet this quarter compared last year’s figures .
Despite these trends however ,Kidder Mathews offered an optimistic outlook based on Silicon Valley’s booming AI sector and stable asking rents . They stated that “although transactions have slowed due to poor economy conditions ,Silicon Valley remains a leading technology hub and demand is still high enough justify keeping prices steady.”
