South Peninsula Office Market Report
Strong leasing activity in the first three quarters of this year, signals that the market is recovering from previous lows. Along with a positive 150,000 SF of positive net absorption could be forecasting an upward trend in following quarters. The South Peninsula leasing market has exhibited a continuous downward trend in asking rates, encompassing all property classes and transaction modalities. Notably, sublease rental rates have mirrored this broader market trajectory, registering a marginal reduction in sublease rents in Q3. Free rent, TI’s, and mixtures of each are continuing to be important tools to be able to make deals happen given the current market conditions. In addition, as companies continue to look for ways to bring employees back to the office, amenities including flexible workspaces, more conference rooms, and up-to-date infrastructure also play a big role.
Download South Peninsula Office Market Report 3Q24South Peninsula R&D Market Report
The South Peninsula market recorded 493,358 square feet of gross absorption in the third quarter of 2024, marking the second consecutive quarter to exceed the five-year leasing average. All transactions in the quarter were direct leases, indicating a shift away from sublease opportunities despite their typical rental rate advantages. Despite the South Peninsula’s historically strong rental rates—driven by premium R&D space and life science users—market softening has impacted pricing. Average asking rates decreased from $5.59 to $5.44 per square foot, consistent with broader commercial real estate market trends.
Download South Peninsula R&D Market Report 3Q24