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The Silicon Valley and San Jose Office Space market is HOT!


It is very hard to find the right San Jose office space. We provide you the information you need with our LOCAL pros. Give us a try.

The Silicon Valley area has over 63 million square feet of office space with San Jose proper having about 1/3 of that space. San Jose is the largest city within the Silicon Valley and is known as the “Capital of the Silicon Valley.” The entire area is well known for its high-tech companies that have office space in the area. One of the main reasons for the success in the high-tech arena of the area is its proximity to great universities, such as Stanford and Cal Berkley, that push out thousands of graduates in engineering and computer science graduates each year. If you have a high-tech company, it is the mecca to finding high quality employees. Unfortunately, due to the success of the high-tech industry, the cost of living in the area is one of the highest in the US.

If you are looking to locate an office space for rent in San Jose or the Silicon valley, it won’t be easy to find the right space on your own. While there is a lot of space, there is not a lot available and when you find it, it can be very expensive. Make sure and take advantage of the FREE services a LOCAL office space tenant representative can provide. They will make sure you see all of the available options that fit your needs, set up tours of the viable alternatives and help you negotiate the best possible deal available. In the process, they will save you tons of time, frustration and ensure you avoid costly mistakes. It is a must. Trying to do it by yourself will end up costing you both time and money. When the service available is free, what is not to like?

What we offer is to help you find the best office space tenant rep for your needs. Just fill out the form at the top of the page and we will have a highly qualified rep contact you right away. There is no obligation so you have nothing to lose. Give it a try. You will be glad you did.

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Leasing Silicon Valley or San Jose Office Space

Silicon Valley got its name due to there originally being a large number of silicon chip makers based in the area, but now, it has become a more generalized high-tech hub. It is also home to famous universities like Stanford and Cal Berkeley. This draws both students and the already-educated to come here seeking employment, further education, and the great weather. The universities graduate thousands of new diplomates every year, and this provides a steady stream of potential employees who have learned the latest in computer technology and engineering, among other subjects.

Several cities are included within the area considered to be Silicon Valley. San Jose is the largest of these, and is therefore unofficially called the capital of the area. Palo Alto, Mountain View, and Sunnyvale are other important metropolises in this exciting area. The entire valley corresponds roughly to the borders of the geographical Santa Clara Valley, though it is not an exact match.

History

Though many people only became aware of Silicon Valley after the influx of chip makers to the area, this region actually has roots in tech that go much deeper. It was way back in 1938 when William Hewlett and David Packard began development work on their audio oscillator, and now, the garage where this took place is a local historic landmark designated "the birthplace of Silicon Valley." Even before that, there was notable technological advancement here: In 1853, a telegraph system was set up to relay information to the San Francisco Merchants' Exchange, and this was the first use of telegraphy in California.

An Overview of Current Conditions

While there are plenty of tech companies and job opportunities here, housing prices are also extremely high. This can be great for established residential landlords, who will find plenty of people who must rent due to the unaffordability of owning a home. However, it is also a source of pressure to pay high wages, which is causing companies who come to this area to seek highly-educated workers. It is hard to get people to do minimum-wage jobs because those do not make economic sense to residents who are not still living at home. For this reason, Silicon Valley has more R&D (research and development) types of installations as opposed to basic factories and call centers.

Leasing in the Silicon Valley

Vacancies are down and leasing rates are up this quarter, according to a CBRE report. This is, in part, due to five leases being signed for 100,000+ square foot properties. Silicon Valley has been hot all year, with a total net absorption of 3.5 million square feet. The most sought-after space is oriented toward modern, transit-oriented designs, and these have seen plenty of leasing before they even open. In fact, 12 of 19 projects are already 100 percent pre-leased.

Notable Deals and Developments

Computer memory giant Micron International signed for 603,666 square feet of space in North San Jose, which amounts to three times its then-current space in the Valley. It plans to sublease one of the buildings involved. This, says Colliers, allows it to secure a large block of space in a market that is inexorably running out of them.

E-commerce king Amazon has secured 385,000 square feet in Sunnyvale's Moffett Towers I. This lease expands its Moffett-area holdings to 1.7 million square feet.

Google and Johnson & Johnson's joint venture, Verb Surgical, took up just over 234,000 square feet in the Stadium Tech Center, which is on the border between North San Jose and Santa Clara.

Apple's newly-constructed 777,000+ square foot Sunnyvale campus came online this quarter.

In Mountain View, Google expanded its footprint by pre-leasing an entire complex of nearly 246,000 square feet. This property is on Plymouth Street.

At the end of the second quarter, 4.7 million square feet of office space was still under construction. According to Colliers, about 70 percent of this is already pre-leased. Thanks to this pre-leasing, available space has actually dropped compared to prior quarters, causing a tightening of the market and increased rents.

It is important to note that these huge deals are for office space, not factory production or warehouse/distribution activities. This shows how robust the the tech economy is in this area, and gives an idea of how tight the labor market will be.

Notably, these and other developments are much closer to each other than their different cities imply. In reality, they are no more than five miles apart when traveling the 237 freeway corridor.

R&D Space is Also Hot

In the tech world, R&D and Office are sometimes overlapping space types, with the distinction being more about the type of education that the workforce has than the types of buildings they work in. This is made clear by Facebook's leasing of 750,000 square feet in the Ardenwood Corporate Park in Fremont, which is directly across the bay from the company's huge Menlo Park headquarters. It is meant to create a campus more accessible to Facebook's East Bay workers. The company is so big here that it is even considering financing light rail infrastructure over the Dumbarton Bridge to further connect the two campuses.

There are only two projects meant to bring R&D space online, and vacant area in this sector is shrinking. This has brought the average weighted asking rent to a historic high, at $2.25 NNN.

As is usual in all markets, there were many smaller projects and deals in the Silicon Valley as well as the headliners. These leases take up space meant for small businesses and outposts, so they affect the market for companies who don't need to rent entire complexes. Since they often don't make headlines, it is important for those moving into the area to work with someone who knows about them and how they are impacting the leasing landscape.

We at OfficeFinder can connect you with a tenants' representative in the Silicon Valley so that your move into the area goes smoothly, you find space that provides everything you need, and you don't end up paying more than you should be. Just contact us to get started on getting the help you need to find your new location and successfully negotiate a great deal.

Useful Statistics for businesses looking for office space in San Jose
  San Jose CA State
2016 Estimated Population 1,009,363 38,654,206
Median Age 36.1 36
Housing Units 328,185 13,911,737
Occupied 317,317 12,807,387
Owned 181,122 6,929,007
Rented 136,195 5,878,380
Average Household Size 3.13 2.95
Rental Vacancy Rate 2.3% 3.8%
Homeowner Vacancy Rate 0.5% 1.3%
Median Home Value $658,000 $409,300
Median Monthly Rental Cost $1,689 $1,297
Estimated Mean Income $125,517 $101,373
Median Household Income $90,303 $63,783
Percent of Individuals below poverty level 10.9% 15.8%
Educational Attainment: Percent high school graduate or higher 82.9% 82.1%
Educational Attainment: Percent high school graduate 17.4% 20.6%
Educational Attainment: Percent with some College 17.8% 21.7%
Educational Attainment: Percent bachelor degree or higher 40.2% 32%
Average Commute time in minutes 28.5 28.4
Commute 486,960 17,193,695
Commute by car, truck or other vehicle - Drive Alone 371,612 12,636,396
Commute by car, truck or other vehicle - Carpool 56,466 1,825,507
Use Public Transportation 20,394 894,813
Work from Home 19,931 934,436
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