South Peninsula Office Market Report
Absorption in the second quarter of 2023 totaled negative 1.3 million SF. This is the fifth consecutive quarter of occupancy losses. Major tenants continue to shed large blocks of space as they consolidate their operations. Year to date, there has been 1.9 million SF of net occupancy losses. The construction pipeline remains low by historical standards, with just ±488,000 SF underway. There was one completion this quarter, Intuit’s 179,000 SF headquarters expansion, indicating continued interest in the region from tech despite uncertainty. The vacancy rate increased year-over-year to 18.1% while rents continued to fall as large block sublease space continues to enter the market. Asking lease rates held steady quarter-over-quarter at $6.24/SF but are down 2.2% year-over-year.
Download South Peninsula Office Market Report 2Q23South Peninsula R&D Market Report
Net absorption in the second quarter of 2023 totaled negative 544,348 square feet. Though occupancy losses were not as severe as the office sector, the R&D market saw several large vacancies as well as a diminished amount of leasing, with just five deals over 10,000 SF. The vacancy rate in the overall South Peninsula market rose to 11.6% from 9.7% quarter-over-quarter and from 7.6% year-over-year. Rents have steadily decreased for the third straight quarter, settling at $5.29/SF in the second quarter of 2023 as the market adjusts to newly added R&D spaces. Venture capital has become tight. According to Crunchbase, VC funding in the first quarter of 2023 fell 53% year-over-year to $76 billion.
Download South Peninsula R&D Market Report 2Q23