Silicon Valley office market faces ongoing challenges as pandemic looms
Effects of the COVID-19 pandemic continue to damper economic activity and soften office market conditions across Silicon Valley. By the end of the fourth quarter, overall availability reached 18.2%, a 400-basis-point increase year over year. As organizations continue to focus on managing costs in uncertain times - including their real estate - large blocks of sublease space have flooded the market, contributing greatly to the overall rise in available space. Over the last 30 days, roughly 300,000 square feet (sf) of sublease space has hit the market. With abundant options at below-market pricing, overall average asking rents are starting to see some decline, falling 4.0% over the year to $4.71 per square foot (psf) per month.