SAN JOSE — The South Bay office market is showing signs of improvement amid ongoing tech layoffs and shrinking of space requirements, but the sector remains far from healthy, a new JLL real estate report shows.
The vacancy rate in the second quarter of 2024 was unchanged from the 21.9% office vacancy level in the January-through-March first quarter of this year. In the second quarter compared with the first quarter of 2024, asking rents for office spaces offered directly by property owners fell 1.4 % while asking rents for sublease spaces offered by tenants fell 1.6%, JLL estimated.Asking rents for offices averaged $5.53 a square foot per month in the second quarter of this year, according to JLL.
In April 2024, PwC U.S. Group, a professional services firm, struck a deal to lease 141,000 square feet in the One Santana West office building. The three Google-owned offices under construction total a combined 1.4 million square feet. The three office buildings are at 100 and 200 Caribbean Drive and the corner of West Java Drive and Bordeaux Drive.“The remainder of the pipeline is slim,” JLL stated in its report. “On-hold projects are not expected to proceed any time soon.”