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LEASING STEADY
Deal volume exceeded 2.6 million square feet (msf), as larger leases continued to boost volume. Tenants have leased 7.9 msf in the four most recent quarters.
AVAILABILITY PUSHES LOWER
The region’s overall availability rate continued its sharp decline, falling by 170 basis points to 14.1%. The Class A availability rate dropped by 330 basis points to 16.3%, its lowest mark since 1Q 16. Availability remains negligible in Menlo Park, Palo Alto and Sunnyvale/Cupertino with single-digit availability in these core locations.
RENTAL RATE DECLINES
Regional overall asking rent fell by 3.8% to $49.01 ($4.08 monthly) during the third quarter. Class A rent dipped by 1.5% to $51.74 ($4.31 monthly), but has jumped by 2.0% year on year.
SALES DROP
Office property sales during the first seven months of the year totaled $1.7 billion, a 28.6% decrease compared to the first seven months of 2017.
"The Valley's steady streak of major leases continued in the third quarter as new developments such as Coleman Highline and Santana Row captured additional activity from major tenants. Even as larger firms boost activity the flow of smaller businesses out of the market is a growing concern."
Nathan Currie, Corporate Managing Director