Michaels adds that the city is motivated to try to rejuvenate the CBD with parking incentives and Caltrain bullet trains that go into downtown. “There’s not been a big, big exodus or push on the part of tech companies to go downtown,” Michaels admits. “The professional-service guys, accounting and law firms have expanded somewhat downtown, but in terms of a lot of companies moving downtown, that has not yet happened. But more and more are looking at it as an alternative.”

Properties are available downtown to suit tech companies’ needs, including some larger blocks of space and a combination of newer and older space. “The majority is second-generation space, some brought to market ready, and one large building Legacy has that’s 300,000 square feet in a single building,” says Michaels. “For large-block users, that’s an option.”

Michaels predicts that rents in outlying areas will likely rise by another 5% through the end of 2012 and that vacancy will probably drop another percentage point with not much room to go before hitting 0%. He also anticipates that markets in Milpitas and Fremont will eventually increase in velocity, though those are typically the last to improve.

“Social media and gaming companies in particular are expected to keep the market sizzling in the suburbs,” Michaels tells GlobeSt.com. However, Cresa forecasts that the CBD market will be relatively flat before picking up in 2013.

Studley points out that Silicon Valley and New York City are the only two markets to have recovered all of the office-using jobs lost in the last recession. In fact, as of May, office-using employment in Silicon Valley was nearly 2,500 jobs above its prior peak in late 2008, and the area’s top employers continue to plan for substantial workforce expansion.

“As the market tightens, tenants are becoming more creative and proactive in their search for office space, exploring a wide range of options including build-to-suit, purchase and adaptive reuse of existing retail or residential space,” Fox said.

Michaels says that rehabbing, which Globest.com recently reported is a Bay Area and Silicon Valley trend, is another option for users. Cresa’s second-quarter tenant’s guide shows that companies are continuing to lease higher-quality projects, which has led some owners of second- or third-generation space to completely recondition older improvements. “Most tech companies seeking creative space that have gone this route, partnering with a project manager to manage the build out, report very good results.”