After a robust first half of 2019, particularly in the 2nd quarter, activity leveled off in the 3rd quarter. Both Net Absorption and Vacancy mostly remained flat for the quarter, which caused
average rental rates to do the same. With Silicon Valley submarket vacancy rates in the low single digits, the lack of overall activity may be more a symptom of the overall strength of the R&D market than a sign of weakness or a slowdown. After all, it’s hard to have activity when there isn’t any product available to lease! Despite the lack of vacancy throughout much of the Valley, select submarkets such as North San Jose, Milpitas, and South San Jose still provide opportunities for tenants looking for quality R&D options.