South Peninsula Office Market Report
The South Peninsula market posted 776,485 square feet of gross absorption in Q2, putting the region on track to hit the 15-year historic average of 3.5 million square feet for the year. The South Peninsula market experienced 49,649 SF of positive net absorption in 2Q25. Palo Alto itself recorded 75,227 SF of positive net absorption throughout the 2nd quarter. Palo Alto and Mountain View were the standout performers, accounting for 31.8% and 29.4% of total absorption respectively, with both cities logging over 225,000 square feet of leasing activity this quarter. This shows that these two key markets are experiencing solid demand and attracting tenants
Download South Peninsula Office Market Report 2Q25
South Peninsula R&D Market Report
The South Peninsula market experienced subdued leasing activity, registering below the five-year average for the second consecutive quarter. Despite a modest quarter-over-quarter improvement, total leasing volume declined 36.5% year-over-year. The sluggish performance in total R&D transactions contributed significantly to this slow first half of the year. Moving forward, we will closely monitor market conditions to determine whether these two quarters represent an anomaly or signal the beginning of a longer-term trend. The South Peninsula recorded modest leasing activity this quarter, with 424,346 SF of total leasing. Two of the 5 largest deals in the region were completed by South Peninsula brokers, including the largest R&D deal of the quarter.
Download South Peninsula R&D Market Report 2Q25