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Availability holds flat, still asking rents push upwards
Overall availability in Silicon Valley ended the fourth quarter at 14.4%, a slight 40-basis-point-increase over the year. Class A availability was similarly unchanged, dropping just 10 basis points over the year to 17.1%. Still, asking rents push upwards, ending the year at $4.97 per square foot (psf), per month, for all classes and $5.51 psf monthly for class A space. Asking rents in prime submarkets like Palo Alto and Mountain View closed the quarter with averages well-above $6.67 psf, per month. Rising rents have forced tenants to look south to lower-cost submarkets, like Downtown and North San Jose, for more affordable options. Silicon Valley unemployment rates have reached a recent low of 2.7%, and as companies find it even harder to recruit and retain talent, location has become an increasingly important factor in real estate decisions.