Search
 

Record Leasing Brings Development Frenzy To Silicon Valley

PALO ALTO, CA-The region reports 2.7 million square feet of office absorption during 2011, which hasn’t been seen since the 1990s dot-com era.

By Carrie Rossenfeld | Updated on May 24, 2012

PALO ALTO, CA-Silicon Valley’s status as the “most dynamic and rapidly tightening US office market” continues as GlobeSt.com receives reports of dramatic leasing activity not seen since the 1990s dot-com era. Due to shrinking vacancies throughout the Silicon Valley, a huge increase in development activity is taking place.

“From 2008 to the middle/end of 2011, there was a complete stoppage of new-development activity for class-A office space, and that was largely a function of lack of construction debt from the lenders’ perspective,” Michael Polentz, co-chair of the real estate and land-use practice at Manatt, Phelps & Phillips here, tells GlobeSt.com. “Nobody was willing to do any spec development unless they had a tenant lined up. But by the end of 2011, leasing activity of existing product started moving at lightning speed. This was due largely to the low vacancy rate, and we had some large tech players that were presumably looking out strategically three to five years, recognizing that there was not a lot of existing product available, so they started gobbling up space.” GlobeSt.com recently reported on a similar phenomenon of space hoarding in the San Francisco office market.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.