A preliminary look at mid-year 2012 market stats

| July 5, 2012 | 0 Comments

Just got a first look at preliminary (and very much subject to change) quarterly stats for the Peninsula at the close of Q2.   We show a slight increase in the vacancy rate for San Mateo County over last quarter, from 12.5% to the current 12.8%.   My sense is that we’ll see a similarly modest boost in vacancies for the Southern stretch of the Peninsula (the key submarkets of Palo Alto and Mtn View) once Santa Clara County numbers are finalized in the next week or so.

I think more noteworthy is the slowdown in Gross Absorption (measuring all leasing activity in a market area)-  about 665,000 square feet in San Mateo County and I’m guessing a little bit under a million square feet for the entire Peninsula once we wrap the numbers for the whole region.  Maybe not anemic, but definitely a noteworthy dip from what we saw at this time last year– the San Mateo County figure is about half the quarterly average for 2011, and the second lowest total since the end of 2009.  I’ve noted for a while that the heady market of 2011 may have looked stronger than it really was due to massive leasing activity by only a few users– I think that the current quarterly snapshot confirms this.

The local market looks pretty healthy to me– rents are going to remain strong for core Class ‘A’ space for a good while.  Still, I think there’s a pretty good case to be made that many of the tightest submarkets are at or near a peak in lease rates.   It should also be no surprise to see a bit of a correction in a rapidly declining vacancy rate for the broader market, either.

Expect to see our Quarterly Report for the Peninsula in a week or so.  Until then, our stats for San Mateo County can be found HERE.

 

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