Silicon Valley’s office market concluded 2021 on a high note with increasingly large leases, new construction, and ongoing venture capital appetite. Meta recorded the largest lease of the year with a 719,000 square foot lease at 1275-1395 Crossman Avenue in Sunnyvale. Tech firms continue to display confidence in the office market in Silicon Valley. LinkedIn and NVIDIA contributed 1.1M square feet to overall positive net absorption in the quarter. NVIDIA completed their 750,000 square foot expansion at 2600 San Tomas Expressway in Santa Clara, and LinkedIn completed their 245,000 square foot owner-user project at 800 E Middlefield Road while leasing 195,000 square feet at 684 W Maude Avenue.
Big tech continues to push Silicon Valley’s office market by continually taking large swaths of space, indicating that on-premise options will continue to be a major factor in their overall workplace strategies in the future. Although vacancy recorded a 1.4% increase year-over-year, asking rental rates recorded a 9.4% increase in the same time period. Looking ahead, vacancy is expected to increase in the short term, but compress in the long term. Rental rates are expected to trend upward with increased demand and newly constructed buildings coming online.