Anyone need 44 million share feet of office space?
As the San Jose Mercury News reports, nearly 20% of Silicon Valley’s commercial office buildings stood empty at the end of 2009 - the worse vacancy rate in at least 15 years. And the situation is expected to get worse in 2010.
Grubb & Ellis predicts that the office vacancy rate this year will hit 22.4%, up from 19.1% at the end of 2009. The vacancy rate for R&D buildings is expected to his 18.5% this year, up from 17% at the end of last year.
The average monthly rent for Valley office space is expected to drop to $1.87 per square foot in the second half of this - down 28% from the $2.58 level at the end of 2009.
Good news if you need office space; not so good if you happen to be a landlord.
It looks like the recession is slamming Silicon Valley, but this city always bounces back. Also, I don't think this recession has hit San Jose as hard as the last one. When the internet bubble burst, my commute to downtown San Jose seemed like I was going through a highway ghost town. These days, I still contend with plenty of traffic. If things get really bad, I will notice traffic declining, and traffic has remained steady for the past five months.