South Peninsula Office Market Report
| Average NNN Asking Rent (Price/SF) | $6.51 |
| Availability Rate (%) | 17.1% |
| Net Absorption (SF) | -501,373 |
The South Peninsula office market took a dramatic turn in the fourth quarter of 2022 against the strong overall leasing activity experienced in the first three quarters of the year. The previous quarter posted 119 transactions and approximately 110 transactions just a year ago; this quarter, only 49 total lease transactions, the lowest transaction volume since the fourth quarter of 2020 during the height of the pandemic. Gross absorption totaled approximately 245,000 square feet, representing a 60.0% drop when compared to the average of the previous seven quarters. In each of the previous two quarters, the South Peninsula posted over 800,000 square feet of gross absorption. Net absorption continued to dip for the third quarter in a row, totaling negative 501,373 square feet. The South Peninsula market totals approximately 39.0 million square feet of office space, with an availability of approximately 6.6 million square feet, representing an overall availability percentage of over 17.0%. This number increased every quarter of 2022 and is up from 13.0% in the first quarter of 2022. Another approximately 670,000 square feet of available square footage was added to the South Peninsula market this quarter. 89.0% of the 670,000 square feet of available space added is categorized as sublease.
Download South Peninsula Office Market Report 4Q22South Peninsula R&D Market Report
| Average NNN Asking Rent (Price/SF) | $5.82 |
| Availability Rate (%) | 9.7% |
| Net Absorption (SF) | -282,903 |
In the third quarter of 2022, the South Peninsula’s overall gross absorption was slightly lower than the previous quarter but equal in transaction volume; however, the leasing activity for the first three quarters of 2022 is approximately 50.0% less square footage than what was leased in the last three quarters of 2021. The South Peninsula market saw approximately 450,000 square feet of total leasing and pushed the region to negative net absorption of approximately 283,000 square feet for only the second time in the last six quarters.