The area ranks third nationally, behind Manhattan and Atlanta,in demand for office space with 8 million sf of net leasing. Italso sits high in the Class A rental rates list at $54 per sf, justbehind San Francisco and Boston. Silicon Valley's 2.43% rentalvacancy rate, places it second in that category, trailing Seattle's1% vacancy rate.

The average rental rate for central business district Class Aspace across North America's office markets leaped 6.9% to $22.72over the past six months, 9.3 % compared to a year ago.The averagerental rate outside CBDs is now $23.96, up 3.5% this year and 5.9%over the past 12 months.

Silicon Valley residents can't look to suburbia for relief. Theaverage rental rate there increased by 92% or $33.40 as spacescarcity grew in more urban areas. At $70 per sf., Silicon Valleyhas North America's highest average rental rate. Nearby SanFrancisco suffered rents climbing an average of $18, a 35% increasein the city's CBD over the past six months.