North Peninsula Office Market
| Average FS Asking Rent (Price/SF) | $6.05 |
| Availability Rate(%) | 9.5% |
| Net Absorption (SF) | 378,981 |
While the office real estate market took a hit in the early days of the pandemic, demand has rebounded as the worst of the crisis is behind us. Tech companies continue to roll out plans to reoccupy offices, while larger Class A space located in downtown cores with accessibility to transit remains a popular commodity. Office demand this quarter was recorded at 3.3 million square feet, up from 3.0 million square feet in the previous quarter and up from 3.1 million one year ago. Absorption for the quarter was 378,981 square feet, the fourth consecutive quarter of positive net. The total market-wide average rate increased to $6.05/SF full service, while the Class A rate continued its upward trend in the North Peninsula’s marquee properties, ending at $6.76/SF, up from $6.59/SF in the previous quarter. The average Class B rate increased to $5.00/SF this quarter, up from $4.98/SF in the previous quarter, while the average Class C rate decreased to $3.71/SF, down from $3.78/SF in the previous quarter. Market-wide vacancy dropped to 9.5% this quarter, down from 10.1% in the previous quarter and down from 14.7% one year ago. On the sublease front, vacancy counted for 2.23% of the total inventory and 23.5% of the total vacancy, compared to 2.16% of the total inventory and 21.4% of the total vacancy in the previous quarter.
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| Average NNN Asking Rent (Price/SF) | $3.25 |
| Availability Rate (%) | 5.7% |
| Net Absorption (SF) | -186,073 |
The market-wide R&D average rate closed yet again at a record high of $5.63/SF triple net, which is up from $5.25/SF in the previous quarter and up from $5.13/SF one year ago. After recording positive absorption in the prior five quarters, the North Peninsula R&D market took a step backwards, closing at negative 386,135 square feet. Large blocks of space coming online caused the market-wide vacancy to increase to 4.9%, up from 3.8% in the previous quarter, with availability also increasing to 6.8%, up from 4.9% in the previous quarter.
The market-wide industrial average rate closed at $1.66/SF triple net, which is up from $1.59/SF in the previous quarter and up from $1.60/SF one year ago. For the second consecutive quarter, more space was leased than made available across the industrial sector, resulting in 200,062 square feet of net absorption. Market-wide vacancy for the North Peninsula industrial market decreased to 3.7% this quarter, down from 4.7% in the previous quarter, while availability also decreased to 4.8%, down from 5.3% in the previous quarter.
Download North Peninsula Industrial Market 1Q22