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Overall Silicon Valley Office Vacancy at 12.7%

SAN JOSE, CA-Five straight quarters of negative net absorption pushes the overall vacancy rate up by 270 basis points.

By Brian K. Miller | Updated on August 10, 2008

SAN JOSE, CA-Silicon Valley office vacancy was a healthy 10% in March 2007, give or take a few basis points. After five quarters of negative net absorption, it now stands at 12.7%, according to Cornish & Carey Commercial, a well-known brokerage firm in the region.

During those five quarters of negative net absorption only the 5.8 million-sf Mountain View office submarket posted positive net absorption more often than not, and when it was negative it wasn’t by much. Not coincidentally, it also has the lowest average Q2 vacancy rate at 6.7%, up only 10 basis points from Q1, and the one of the highest average asking rental rates at $3.42 per sf per month, fully serviced, down from $3.48 in Q1, according to C&C.

The 1.2 million-sf Downtown Mountain View market produced 37,000 sf of positive net absorption, taking vacancy to 7.1%; the average asking lease rate came in at $4.24 per sf per month. The 2.4 million-sf Shoreline market in Mountain View posted 42,000 sf of negative net absorption but vacancy remained at a miniscule 3.4%; the average asking lease rate is $3.05 per sf per month.

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