Falling San Mateo Office Occupancy Leveling Off

SAN MATEO, CA-The rate at which office vacancy is climbing in San Mateo County is tapering off, according to a mid-year market report by Colliers International.What was an average quarterly increase of 5% during 2001 has slowed to an average increase of 0.5% through the first half of 2003, according to the report. At the end of the second quarter, vacancy stood at 23.29%, a 0.86 percent increase from the end of the first quarter. As well, year-to-date net absorption, although negative to the tune of 241,948 sf, compares well to mid-year 2001, when it was at negative 2.6 million sf, and mid-year 2002, when it was at negative 1.03 million sf.

Jeff Dizon, research analyst at Colliers in San Mateo, says the number of layoffs also has leveled off in San Mateo County. “So we definitely think we’re heading toward stabilization of the market,” says Dizon, adding that the area’s desirable geographic location and attractive demographics have it postured to begin a modest rebound in the near future.

Nonetheless, the situation heretofore has translated into an unprecedented 8.9 million sf of available office space, up from just 325,218 sf in mid-2000, reports Dizon. About 28% of the total available space, or 2.5 million sf, is sublease space.