SAN JOSE — The office market in the South Bay showed signs of stabilizing in a big way during the first three months of 2024, buoyed by a major sublease deal involving two Silicon Valley tech titans.
The improvements were sketched out in a preliminary report for the Silicon Valley office market in the January-through-March first quarter of 2024 that CBRE, a commercial real estate firm, provided to this news organization.
Among the key barometers of improvement: The office space availability rate — the broadest measure for the amount of empty space in a geographic area — showed modest improvement during the first three months of this year.
“Silicon Valley’s office market is beginning to show signs of recovery,” said Ben Knight, a CBRE executive vice president. “It’s going to take some time to work through the office supply.”
The office availability level, which measures the combination of empty office space that property owners are offering directly or spaces that tenants are offering through being offered through subleases, improved in the first quarter compared with the October-through-December fourth quarter of 2023.
In the first quarter of this year, the availability rate was 20.8% for office space in Silicon Valley, CBRE estimated in its preliminary report for the Silicon Valley office market. That was a modest improvement from the availability rate of 21.1% in the fourth quarter.
“Increased activity from tenants in the last quarter is a positive sign,” Knight said. “Silicon Valley continues to reinvent itself, which bodes well for its real estate.”