New Year, New Tenants
The overall vacancy rate for all property types across the San Francisco Peninsula increased from 4.2 to 5.4 percent, while rents trended in different directions relative to property type. The weighted average asking rate for research & development (R&D) space dipped from $4.65 to $4.41 NNN per square foot since last quarter, while the industrial sector continued experiencing quarter-over-quarter increases, ending 2019 at $1.94 NNN, up from $1.87 NNN last quarter. With the late addition of sublease space, the San Francisco Peninsula office market closed the quarter with 1,225,737 square feet of negative net absorption. The largest blocks of sublease space are concentrated in three cities; 382,628 square feet in San Mateo, followed by Redwood Shores with 252,603 square feet, and Menlo Park with 142,172 square feet. Sublease space accounts for 45 percent of the available inventory.
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