North Peninsula Office Market
| Average FS Asking Rent (Price/SF) | $5.90 |
| Availability Rate(%) | 11.5% |
| Net Absorption (SF) | 288,766 |
The North Peninsula office demonstrated continued robust activity in the third quarter of 2021, recording its second consecutive quarter of positive absorption, ending at 288,766 square feet. The total market-wide average rate increased to $5.90/SF Full Service, while the Class A rate continued to set record highs, ending at a premium of $6.56/SF, up from $6.22/SF in the previous quarter. The average Class B rate decreased to $5.01/SF, down from $5.14/SF in the previous quarter, while the average Class C rate decreased to $3.89/SF, also down from $3.98/SF in the previous quarter. Market-wide vacancy dropped to 11.5% this quarter, down from 13.5% in the previous quarter, while availability decreased to 12.4%, down from 15.2% in the previous quarter. On the sublease front, vacancy counted for 2.5% of the total inventory and 22.4% of the total vacancy, compared with 3.4% of the total inventory and 25.4% of the total vacancy in the previous quarter.
North Peninsula Industrial Market
| Average NNN Asking Rent (Price/SF) | $2.77 |
| Availability Rate (%) | 5.3% |
| Net Absorption (SF) | 174,199 |
Record-high venture capital funding and demand in the life science sector continues to push the Peninsula R&D market to new heights. After recording 1.2 million and 507,588 square feet of gross absorption in the first and second quarter of 2021, respectively, leasing activity continued to skyrocket, closing the third quarter at 1.36 million square feet. As a result of such elevated activity, the market-wide vacancy dropped to 4.0% this quarter, down from 4.9% in the previous quarter, while availability dropped to 5.5%, down from 7.2% in the previous quarter. The market-wide R&D average rate was recorded at $5.24/SF triple net, which is up 20.2% from the pandemic lows one year ago. The unparalleled demand for life science product has translated into this increase in asking rents, as landlords continue to capitalize on the robust market activity. The North Peninsula R&D market has truly separated itself from its peers and continues to be one of the most sought-after markets by tenants worldwide, a trend that will endure through the next quarter and beyond 2021 as the market fundamentals remain stronger than ever.
Download North Peninsula Industrial Market 3Q21