Third Quarter Ends With A Boom
The office market in the Tri-Valley remains flat across all classes, reporting a 14.1 percent vacancy in the third quarter; a 420-basis point increase from three years ago, which reported a 9.9 percent vacancy. The negative effects of the pandemic linger as companies contemplate contraction of their real estate footprint by continuing to allow their employees to work from home, or if they will summon them back to the office on a full-time basis. Marketwide Class A asking rates average $3.14 per square foot, full service; a 1.3 percent increase in twelve months. Class B office experienced a slightly larger increase in asking rates across all markets, reporting an upward push of 5.0 percent to $2.40 per square foot from this time last year. Asking rates for flex product increased 9.6 percent to $2.28 per square foot, converted to full-service, which is a direct result of the repositioning of properties to accommodate life science tenants. Consequently, the push in overall asking rates across all classes increased by $0.13 to $2.86 per square foot, year-to-year. The tail end of the third quarter created a boom when Sunset Development announced they purchased the 1.3 million-square-foot Chevron campus in San Ramon, then immediately inking a 400,000-square-foot deal with Chevron within the same business park.
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