Pandemic Disrupts Silicon Valley’s Nine-Year Absorption Streak
Silicon Valley’s 9-year streak of occupancy gains was broken in 2020. The market saw net absorption fall by another 174,000 square feet in Q4 2020, bringing the annual occupancy deficit to 4.7 million square feet. The COVID-19 pandemic continued to produce economic challenges, elevating Silicon Valley’s overall vacancy rate to 6.5 percent, up 150 basis points year-over-year, the highest since Q3 2017. However, the distress was not felt equally across all sectors in the Valley. While R&D and office sectors witnessed significant quarterly occupancy losses, the industrial market bucked the curve posting 475,000 square feet of occupancy gains in the last quarter of 2020.
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