Silicon Valley’s tech-rich suburban landscape has been key to the region’s economic recovery. While the pandemic-driven downturn adversely impacted virtually all markets across the U.S., the impact on vacancy rates in urban locations has been more pronounced than in the suburbs. The R&D property market will remain an important sector in the Valley’s commercial real estate ecosystem as it is often the origin of innovation and discovery. Additionally, because of the nature of specialized building requirements like lab space, remote-work trends are less likely to negatively impact this sector. The trend of R&D product being repositioned into life science will likely continue in 2022 to meet the growing biotech demand. The industrial property sector remains red hot. An accelerated shift to e-commerce coupled with supply chain disruptions continue to bolster demand – Silicon Valley saw industrial annual occupancy gains reach 2.0 million square feet, making it the fastest growing property sector in 2021.
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