"The good news is Silicon Valley developers completed 5.6 million square feet of new office and industrial space in the first nine months of 2025, the fastest growth rate since 2021, according to the report. The bad news: Commercial footage under development fell to 4.5 million square feet, down 45% from the end of 2024 and down 79% from its most recent peak in 2021 - the lowest level since 2013."
"Commercial leasing in the first three quarters of the year hit 20.4 million square feet, on track for the highest annual volume since 2018. Vacancy rates, while improved slightly to 22% from 23% in the second quarter, are more than double the pre-pandemic rate of 2019 and exceed the peak levels of the dot-com bust in the early 2000s. "Silicon Valley has a split personality right now," land use consultant Bob Staedler told San José Spotlight."
"Commercial real estate and development - often regarded as a proxy for the region's overall health - isn't in crisis and property values aren't dropping, Staedler added. At the same time, the new construction pipeline is shrinking because vacancy rates are more than double what's considered normal. Russell Hancock, Joint Venture's president and CEO, said Silicon Valley - along with the rest of the nation - is feeling the effects of inflation and overall confusion on where government policies are headed."
Silicon Valley developers completed 5.6 million square feet of new office and industrial space in the first nine months of 2025, the fastest growth rate since 2021. Commercial footage under development fell to 4.5 million square feet, down 45% from the end of 2024 and down 79% from its 2021 peak, the lowest level since 2013. Commercial leasing through three quarters hit 20.4 million square feet, on pace for the highest annual volume since 2018. Vacancy rates eased to 22% but remain more than double 2019 levels and exceed dot-com bust peaks. Recovery is expected over time as artificial intelligence and a gradual return to office drive demand.
Read at San Jose Spotlight
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