Downtown Palo Alto market update

| September 7, 2011 | 0 Comments

Our September snapshot of the Downtown Palo Alto submarket is now available. While the vacancy rate ticked up an inconsequential amount (up to 2.45%, from the previous 2.25%, representing a whopping 5000 sf of additional vacant space), the amount of AVAILABLE space (vacant plus occupied space already on the market) dipped by nearly 20%. More interesting are the numbers we’re seeing attached to some of the more noteworthy leases getting cut in the downtown. A few examples:

  • 390 Lytton Ave: ±20,000 sf lease with an effective rate just over $6.00 NNN
  • 661 Bryant St: Converted Church Building of ±13,000 sf, effective above $6.75 NNN
  • 400 Hamilton Ave: 30 year old building, but still one of the pricier (and nicer) addresses in downtown PA, ±12,000 sf, effective over $7.00 NNN

All buildings on the high end of the quality scale in downtown. The fact that they’ve leased has actually paradoxically driven average asking rates down a tick. Our market snapshot can be downloaded HERE

My nearby Town and Country Village mixed-use project (which we used to market as an alternative to downtown Palo Alto, but now, as a mature project, is a sought-after location in its own right) has experienced similar rent growth, and we are witnessing the strongest touring activity since we brought the property on-line. As in the downtown market, our few available spaces are still occupied, and I expect them to lease up rapidly.

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