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San Jose, CA

Apartment
The San Jose apartment market remains tight. Third quarter 2017 vacancy was 4.8%, up 50 basis points for the period and up 40 year-to-date following a 20-basis-points rise in 2015. Vacancy increased 10 points by the end of November as 439 market-rate units completed construction and 335 units were absorbed net. Rent growth cooled notably in 2016. Following annual gains as high as 11.8% over the preceding two years, asking and effective averages saw respective increases of 2.3% and 2.0% in 2016. A stronger performance is under way in 2017. At $2,586 and $2,484 per month, third quarter asking and effective averages were up 4.3% and 4.1% year-to-date. Gains for the latest quarter alone were 1.7% and 1.5%. A very minimal decline, however, followed over the next two months. VIEW APARTMENT LISTINGS >
Industrial
As the data on supply and demand indicate, both the San Jose warehouse/distribution and Flex/R&D markets are tightening. Third quarter 2017 vacancy in the former was 7.9%, down 50 basis points for the period and down 100 year-to-date following a loss of fully 320 through 2016. The negative net absorption indicated for the next two months raised vacancy 2 points. Rent growth in the warehouse/distribution market has been increasing yearly since 2013. At $7.79 psf and $7.16 psf, quite high by national norms for this product type, average asking and effective lease rates for the third quarter were up 3.3% and 3.6% year-to-date following increases of 4.7% and 5.0% through 2016. Gains for the third quarter alone were 1.2% and 1.4% to which October-November added increases of 1.0% and 1.1%. Flex/R&D vacancy ended the third quarter at 12.5%, down 100 points year-to-date after a 220-basis-points decline in 2016. No change had occurred by the end of November in the wake of minimal negative net absorption since quarter-end. Third quarter asking and effective rates for Flex/R&D were $15.96 psf and $14.41 psf, also very high by national norms and up 3.0% and 3.3% year-to-date after increases of 3.3% and 3.6% all told the year before. VIEW INDUSTRIAL LISTINGS >
Office
The San Jose general purpose, multi-tenant office market vacancy rate ended the third quarter of 2017 at 17.4%, up 40 basis points for the period and up 10 year-to-date following a 120-basis-points rise through 2016. The excess of supply over demand that followed over the next two months resulted in a November rate of 18.2%. Rent growth slowed in 2016 and slowed again in 2017, although rates of increase remain substantial—and prices are very high. At $42.03 psf and $33.78 psf, third quarter asking and effective averages were up 1.9% and 2.0% year-to-date following gains of 5.1% and 5.3% in 2016. Third quarter growth rates were 0.5% and 0.4%. Respective gains of 0.7% and 0.6% followed over the next two months. VIEW OFFICE LISTINGS >
Retail
San Jose community-neighborhood shopping center vacancy closed the third quarter of 2017 at just 5.3%, up 20 basis points for the period but down 20 year-to-date following a 120-basis-points increase in 2016. By the end of November, the rate had shed 20 additional points. At $36.19 psf and $31.81 psf, asking and effective rents for the latest quarter were up 3.4% and 3.5% year-to-date following gains of 3.8% and 4.0% through 2016. Gains for the quarter alone were 0.9% for both rates. Respective increases of 0.1% and 0.2% followed over the next two months. VIEW RETAIL LISTINGS >

Source: Data provided by Reis, inc.

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