Commercial real estate property on the San Francisco Peninsula continues its trend of growth and desirability into the second half of 2018, as demonstrated by low vacancy rates and all-time high average asking rates for all three product types. The success is also seen in this quarter’s gross absorption levels, approximately 3,059,555 square feet was leased or sold since July, around 1,852,890 more square feet than third quarter of last year. Vacancy rates have maintained a tight range of fluctuation over the past few years, dropping to the single digits in all markets as asking rates continue to rise.
Like much of the Bay Area, the San Francisco Peninsula commercial real estate market is experiencing challenges allocating its attractive but limited available space. The solution for balancing fruitful office space, the historically successful industrial sector and the burgeoning, tech-driven research and development (R&D) sector has been found in large, flexible business parks in the development pipeline, to relieve pressure put on the existing building base. This competitiveness has supported a market experiencing ubiquitous asking rate growth over the past five years and welcomes large tenants such as Genentech and Facebook to collect additional locations on the Peninsula.
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