Silicon Valley Office Market
Year-to-date net absorption totaled 2.4M SF, the strongest performance since 2018, and represented the fifth consecutive quarter of positive net absorption. Active office-only tenant demand remains strong at 6.0M SF, up 62.2% from 3.7M SF the last quarter, driven primarily by technology firms. This quarter, average asking rents settled at $4.99 per square foot full service, down 0.6% from the previous quarter and 0.2% from the same period last year. The modest downturn highlights continued pricing adjustments and steady rent moderation across the market.
Silicon Valley R&D Market
Overall market vacancy fell 20 basis points from the previous quarter, as most submarkets experienced a vacancy contraction through the end of the year. Silicon Valley’s R&D rental rates decreased 3.7% year-over-year in the final quarter of 2025. Despite the annual drop, rents remained elevated from a broader perspective, up 2.2% from the same period in 2022 and 3.7% from early 2023.
Silicon Valley Industrial Market
Vacancy rose above the long-term average of 5.8% in 2025, ending the year at 6.6%, largely driven by an increase in vacant speculative deliveries. Despite rising vacancy, net absorption improved meaningfully, totaling 505K SF and reversing two consecutive years of negative absorption. Gross absorption totaled 2.1M SF, down from 2.3M SF in Q3, which marked the highest quarterly level since the first quarter of 2019.