The East Bay’s office market began 2022 with no signs of immediate recovery, however there is optimism on the horizon. Although rental rates recorded a 3.3% quarterly increase, vacancy rates also increased 1.9% in the quarter. For tenants that have transacted, such as Azzur Group and Hippo Analytics, marginally higher rental rates were recorded. Stagnation can still be seen in the East Bay, due to tenants just beginning to announce office re-entry plans. Subleases continue to outpace leasing velocity in the direct market resulting in a consistent increase in vacancy rates quarter-over-quarter. Venture Capital may not agree with current market sentiment. The amount of capital invested has increased 48.0% from last quarter, with the same amount of venture capital deals being raised.
Looking ahead, the bulk of transactions will be mostly life science deals, helping to offset any further negative net absorption figures. Expect rental rates to slowly increase as a slight increase in transaction volume can be expected.
Looking ahead, the bulk of transactions will be mostly life science deals, helping to offset any further negative net absorption figures. Expect rental rates to slowly increase as a slight increase in transaction volume can be expected.