South Peninsula Office Market Report
Gross absorption totaled approximately 1.0 million square feet in the fourth quarter of 2025, representing a 10.6% increase from the prior quarter. While this figure trailed the 15-year annual gross absorption average of 3.51 million square feet, activity remained relatively consistent throughout 2025. Despite 20,778 square feet of positive absorption in Q4, the vacancy rate still trended higher in 2025. Net absorption was heavily influenced by 300 Oracle Parkway, which added 294,000 square feet of vacant space to the Redwood Shores submarket. This quarter, average asking rents settled at $5.66 per square foot NNN, a slight decrease from the prior quarter but still above the 2024 average.
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South Peninsula R&D Market Report
The South Peninsula R&D market continued to soften in the fourth quarter, recording –342,225 square feet of negative net absorption. This negative net absorption was primarily caused by 255,792 feet of vacant space being introduced in the Mountain View – Shoreline submarket. This project is known as the “Shoreline Park North Campus” in Mountain View. Vacancy increased 4.0 percentage points over the course of 2025, totaling –950,503 square feet of negative absorption for the year. The fourth quarter of 2025 closed with 241,559 square feet of gross absorption, a 36.6% decline quarter-over-quarter and a 63.7% drop year-over-year.
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