Retail vacancy levels in Silicon Valley increased in the April–June quarter compared with January–March, driven by the exit of several national retailers. South Bay retail vacancy rose to 5.2% in the second quarter, up from 4.7% in the first quarter. Monthly asking rents averaged about $2.81 per square foot in Q2, down from $2.92 in Q1. Vacancy rates varied by submarket, from 3.1% in Sunnyvale and Cupertino to 7.5% in Morgan Hill and Gilroy. Major transactions included a $7.3 million purchase of the former Orchard Supply property and a $95 million sale of The Plant, with subsequent new leases.
SAN JOSE The South Bay retail market is showing signs of weakness following the departure of some big box stores, according to a new report. Retail vacancy levels were higher and asking rents were lower in Silicon Valley during the April-through-June second quarter compared with the January-through-March first quarter, Cushman & Wakefield, a commercial real estate firm, stated in its latest report on the area's retail sector.
The largest retail property purchase in the South Bay during the second quarter involved the long-shuttered Orchard Supply store in south San Jose in July. An affiliate of Dollinger Properties paid $7.3 million for the 5651 Cottle Rd. property. Here are the second-quarter vacancy rates for the primary retail markets in the South Bay, as reported by Cushman & Wakefield: Sunnyvale and Cupertino: 3.1% North San Jose and Milpitas: 4.5% Palo Alto, Mountain View, and Los Altos: 5.1%
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