PALO ALTO, CA-The Silicon Valley office market sustained its dynamic performance in Q4 of 2012 as steady hiring and anticipated expansion among the region’s top employers and up-and-coming start-ups fueled demand for office space. So says a recent report from Studley.
Still, the market remains bifurcated with slower leasing activity in many of the Valley’s second-tier submarkets, including Milpitas and Downtown San Jose, says the firm. “However, as core markets continue to tighten some tenants are exploring these areas as affordable alternatives.”
According to the Silicon Valley report, Studley’s analysis of office market conditions in 12 Valley submarkets, the region’s class A vacant available rate fell to 14.8% in the fourth quarter, a decrease of 3.1 percentage points. The overall rate for vacant available space decreased as well, dropping 0.8 percentage points to 12.2%. In sharp contrast, vacant available rates in Milpitas and Downtown San Jose are approximately 20%.
“As Silicon Valley companies compete for talent and space, some are striking preemptive deals with plenty of expansion opportunities in anticipation of continued revenue and payroll growth,” says George Fox, Studley senior vice president and branch manager of the firm’s Silicon Valley office.
Check back later today for more on the firm’s predictions for 2013, and on major market highlights in Q4.