"Major rental deals powered the South Bay office market to its best year of leasing activity since the COVID-19 outbreak, a new report shows. The report produced by commercial real estate firm Savills determined that while significant improvements have materialized for the sector, a full recovery for the region remains elusive. Full-year leasing volume for 2025 reached 7 million square feet, the highest level post-pandemic, Savills stated in the report."
"The total availability rate for office space improved and shrank during the October-through-December fourth quarter of 2025, Savills reported. The availability rate is the combination of space offered directly by property owners and space offered by tenants through subleases. For the fourth consecutive quarter, office availability decreased, Savills reported. The vacancy level of overall available office space reached 24% in the fourth quarter of 2025, an improvement from 26% in the fourth quarter of 2024."
Major rental deals drove South Bay office leasing to 7 million square feet in 2025, the highest post-pandemic level. Full-year leasing volume rose 26% from 2024. Office availability decreased for the fourth consecutive quarter in Q4 2025, with overall available-office vacancy falling to 24% from 26% year-over-year. Availability combines owner-offered space and tenant subleases. Tenant demand has not kept pace with the volume of new space coming online despite interest from AI and advanced tech firms. Asking rents increased to $5.47 per square foot per month, up 2.8% from the prior quarter. Full recovery remains distant.
Read at www.mercurynews.com
Unable to calculate read time
Collection
[
|
...
]