Rental rates for Silicon Valley high-tech commercial real estate fell almost 30% in 2002, according to recent statistics, and Collier's January report shows that the trend is continuing this year.
According to Colliers, the total amount of available space in Silicon Valley, as of February 1, was more than 50 million sf. In 2002, there was 40 million sf available. In addition, the amount of available sublease space has increased by 2% to 19.1 million sf. The amount of vacant space for lease increased 4% to 30.8 million sf.
Silicon Valley, which is occupied mainly by large and small technology companies, has been hit hard by the technology industry's downturn, which caused local commercial rents to plummet as companies consolidated facilities and cut costs.
During January, the amount of office space available for lease increased by 1% from the previous month and 15% from the previous year, bringing it to 13.7 million sf. The amount of space that is currently occupied but available for future leasing dropped by 128,000 sf, or 2.3% from the month before. Vacant space increased to 650,000 sf, up 9% from December 2002.
The amount industrial space available for lease in the valley increased to 5.9 million sf in January, which is a 3% increase from the previous month. Average asking rates for industrial leases dropped by a penny in January to 66 cents, compared to 93 cents one year ago.
Research and development space available for lease increased by about 900,000 sf during January to 36.4 million sf, which represents a 2.5% increase from December and a 29% increase from the previous year.
Colliers also stated that the amount of warehouse space available for lease in Silicon Valley increased 5% to 6.8 million sf during January. The average asking rate for warehouse leases decreased by one cent to 48 cents.
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