Tech layoffs and retrenchments have shoved South Bay office vacancies higher and transformed downtown San Jose and Santa Clara into the region’s weakest office markets.
SAN JOSE — Tech layoffs and retrenchments have shoved South Bay office vacancies higher and transformed downtown San Jose and Santa Clara into the area’s weakest office markets.
The real estate firm defines the South Bay as Santa Clara County and the Fremont-Newark area for the purposes of the report.Yet while the overall South Bay office vacancy rate is grim, it’s far below the office vacancy rates in the city of Santa Clara and in downtown San Jose. “The vacancy rate has gotten so high in downtown San Jose because we have an amazing state-of-the-art new product coming on line,” said Alex Stettinski, chief executive officer of the San Jose Downtown Association. “200 Park will be the future of the downtown. I’m not worried about these buildings getting filled. Tenants will want to be in here.”
To the north, a jaw-dropping one-third of the office space in San Francisco is empty, brokerage reports state. At the end of June, San Francisco’s vacancy rate was 31.6%, CBRE estimated. The West Valley area, which CBRE defines as West San Jose, Campbell, Saratoga and Los Gatos, also experienced a soft market during the second quarter. CBRE estimated 23.7% of the office space in that region was empty.
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