Bay Area Office Space Market Shows Signs of Recovery

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New commercial real estate reports indicate that although the market for Bay Area office space remains feeble, there is a surge in tenant demand for leasing offices. Vacancy levels remain high, but there are signs of improvement.

The market for Bay Area office space remains feeble, battered by brutally high vacancy levels — but the hunger by tenants to lease offices is starting to surge, new commercial real estate reports show. Empty office spaces remained at or near record levels in the Bay Area’s four primary markets during the January-through-March first quarter of 2024, according to a new report released by CBRE, a commercial real estate firm.

Vehicles are parked on a surface lot in north San Jose next to a Google tech campus on West Tasman Drive near Champion Court, May 2023. (George Avalos/Bay Area News Group) The office markets in the South Bay, the East Bay’s Oakland-Emeryville region, San Mateo County and San Francisco continue to suffer from economic maladies in the wake of the coronavirus pandemic. Both office vacancy and availability rates remained sky-high in the first quarter of 2024, according to the CBRE report. The vacancy rate measures the space being offered for lease by property owners. The availability rate measures the combined amount of space that landlords offer directly plus the space tenants offer through subleases. Here is how the four primary Bay Area office markets performed during the first quarter of 2024 and how they compared with the October-through-December fourth quarter of 2023: — The South Bay office vacancy rate was 19% in the first quarter, worse than the 18.6% in the fourth quarter. The availability rate was 2

 

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