North Peninsula Office Market
| Average FS Asking Rent (Price/SF) | $5.87 |
| Availability Rate(%) | 13.5% |
| Net Absorption (SF) | 202,044 |
For the first time in five quarters, the North Peninsula office market recorded positive net absorption, finishing at 202,044 square feet. The overall asking rate remained steady at $5.87/SF Full Service, while the Class A rate continued to set record highs, ending at $6.22/SF, up slightly from $6.21/SF in the previous quarter. Market-wide vacancy dropped to 13.5% this quarter, down from 14.7% in the previous quarter, while availability increased slightly to 15.2%, up from 14.9% in the previous quarter. On the sublease front, vacancy counted for 3.4% of the total inventory and 25.3% of the total vacancy, compared with 3.8% of the total inventory and 25.8% of the total vacancy in the previous quarter. Currently, the construction pipeline holds approximately 2.4 million square feet awaiting completion. Dostart Development’s 220 Park Road office development in Downtown Burlingame is currently underway, with an anticipated delivery date in second-quarter 2023. The project will feature 170,000 square feet of Class A office space and 15,000 square feet of ground floor retail. On the delivery front, the largest completion of the quarter was Springline, a 211,324-square-foot Class A project located at 1300 El Camino Real in Menlo Park.
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North Peninsula Industrial Market
| Average NNN Asking Rent (Price/SF) | $2.85 |
| Availability Rate (%) | 6.9% |
| Net Absorption (SF) | -111,093 |
Total vacancy continued to increase from cyclical lows in the North Peninsula Industrial market in the first quarter, ending at 6.9%, up from 6.25% in the previous quarter. The sublease vacancy rate for the industrial market increased to 1.1%, up from 0.9% in the previous quarter. Net absorption for the quarter was recorded at negative 399,798 square feet, making this the 10th consecutive quarter of negative net absorption. Due to the flurry of space saturating the market and ongoing decline in net absorption, the market-wide average asking rate dropped to $1.60/SF NNN this quarter, down from $1.64/SF in the previous quarter but down only slightly from $1.61/SF one year ago. No new industrial developments are underway for the North Peninsula as landlords continue to entertain the emerging trend of converting more traditional industrial and warehouse space to support lab and research.
Download North Peninsula Industrial Market 1Q21