A new Silicon Valley report from Colliers International has found that the office market may finally begin to recover after experiencing a rocky first quarter of 2021.
While there is a glimmer of hope for the market, it is still uncertain how fast workers will return to the office, especially since Santa Clara County health officials are still encouraging telework arrangements.
During the first quarter of 2021, Silicon Valley’s office vacancy rate was at 9.4%, up from 8.2% during the fourth quarter of 2020.
In the midst of the pandemic, many organizations decided to let go of office space as remote working arrangements remained necessary. This led to a growth in sublease office space, which has grown for the fourth consecutive quarter.
However, while rents in the first quarter remained lower than the fourth quarter of 2020, rates were higher than this time last year.
Monthly office rents averaged $5.15 per square foot during the first quarter of this year, an uptick from the $5.06 per square foot during the first quarter of 2020.
“There is light at the end of the tunnel with vaccinations ramping up and a date of June 15 set to fully reopen California, which could signal a rebound for Silicon Valley’s office market,” said Lena Tutko, San Jose-based senior research manager with Colliers International.