The R&D market in Silicon Valley remained relatively strong in Q3, amidst continuing uncertainty due to the COVID-19 pandemic and associated shelter in place restrictions from local and state government. Rental rates remained flat overall as compared to Q2. The Palo Alto and Mountain View submarkets experienced decreasing rates, while rates in the Cupertino and Milpitas submarkets increased. With much of the workforce remaining in a furloughed status, and companies implementing work remote strategies, much of the Valley has seen negative net absorption rates and increases in vacancy rates as compared to Q2. Unlike the office sector, which saw a large increase in the amount of sublease space on the market, the R&D sector has seen minimal increases in the amount of sublease space on the market. Large transactions continue to occur, consisting predominantly of lease renewals. Silicon Valley’s Q3 performance indicates a steady demand for R&D space, and a much healthier outlook than we are seeing in the Office sector.