Regional Summaries

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San Jose, CA

The San Jose metro area apartment market is perennially tight. Fourth quarter 2015 vacancy was just 3.9%, a gain of 10 basis points for the period and a gain of 110 for the year. While still robust, rent growth slowed somewhat in 2015. At $2,080 and $2,025 per month, asking and effective averages for the year represented year-over-year gains of 6.7% each. Growth rates for the quarter alone, however, were unchanged and negative 0.2%. With no new projects delivering in January 2016, net absorption for the month ran at 201 units, the vacancy rate decreased by 20 basis points, and gains of 0.2% asking and 0.3% effective were reported. VIEW APARTMENT LISTINGS >
Given the huge role played by high-tech industry in Silicon Valley, the local Flex/R&D real estate market, counted by Reis at 64.6 million square feet, is nearly twice as large as the 34.6 million square feet that comprise the local warehouse/distribution market. Vacancy in the Flex/R&D ended 2015 at 15.7%, a decline of 120 basis points since year-end 2014 that included a loss of 40 during the final quarter. Rent growth, while slowing in 2015, has been substantial. Average fourth quarter asking and effective rates for Flex/R&D space were high at $14.52 psf and $13.03 psf, up 2.1% and 2.4% for the year. Respective increases for the final quarter alone were 0.7% and 0.8%. January 2016 followed with 25,000 square feet if net absorption alongside no new supply deliveries, gains of 0.1% for both mean rents, and no change in the vacancy rate. Vacancy in the San Jose warehouse/distribution market ended 2015 at 12.6%, unchanged during the final quarter but down 100 basis points from a year earlier. At $7.15 psf and $6.54 psf, also quite high by national norms, fourth quarter mean asking and effective warehouse/distribution space lease rates were up 2.0% and 2.3% for the year. Increases of 0.6% are indicated for both rates for the final quarter. January followed with 5,000 square feet of positive net absorption, no new warehouse/distribution space deliveries, a 10-basis-points decrease in the vacancy rate, and gains of 0.1% and 0.2% for the average asking and effective rents. VIEW INDUSTRIAL LISTINGS >
San Jose area/Silicon Valley general purpose, multi-tenant office market fourth quarter 2015 marketwide vacancy was 16.2%, down 160 basis points for the year, down 70 points during the latest quarter. At $36.44 psf and $29.15 psf, fourth quarter asking and effective averages as reported by Reis were up 5.9% and 6.2% for the year. Respective gains for the latest quarter alone were 1.8% and 1.9%. VIEW OFFICE LISTINGS >
Fourth quarter 2015 vacancy in the San Jose community-neighborhood shopping center market was just 4.3%, down 10 basis points for the period, up 10 for the year. At $33.70 psf and $29.56 psf, very high by national norms, fourth quarter average asking and effective rents for community-neighborhood center space were up 3.7% and 3.8% for the year. Fourth quarter increases were 1.0% for both rates. At $39.93 psf, the fourth quarter mean asking price for non-anchor power center space was up 3.6% year-over-year. The negative net absorption reported for the community-neighborhood center sector for January 2016 was accompanied by a 40-basis-points increase in the vacancy rate and an essentially flat performance for average rents. VIEW RETAIL LISTINGS >

Source: Data provided by Reis, inc.

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