We have released our Q3 2010 market report for the Silicon Valley Medical office space market. Vacancies continued to rise slightly to about 8% across 385 buildings. Rents remained fairly steady at an average of $2.44 psf/month. Despite the gloom and doom that hangs over the economy, there are signs of improvement. May of Silicon Valley’s largest companies are flush with cash, and continue to hire. There is also activity in the venture-backed world and competition for engineers at many of Silicon Valley’s tech companies is fierce right now as evidenced by Google’s 10% across the board pay-raise (30% for execs) and year end bonuses.
In the medical office market though, if you are a tenant, it continues to be a good time to lease or purchase. Interest rates are low on the purchasing front, and landlords are being aggressive with rent concessions and improvement allowances on the leasing front. It’s not quite a landlord’s market, but some sub-markets have experienced great leasing activity this past quarter, while others such as the El Camino/Mountain View and Palo Alto markets never really went down.
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