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Market Report

San Jose Office Market Report

2024 Investment Forecast

Early Indicators Suggest Buyers Returning to Market,
Despite Lingering Uncertainty

Amenity-rich floor plans to escape the most acute impacts of ongoing downsizing. In April, national fintech firm Acrisure will become the first tenant at One Santana West, part of a broader mixed-use development incorporating office and retail. This property is one example of the upper-tier facilities primed to perform in the current leasing environment. In addition to a plethora of high-end shopping and dining experiences within immediate walking distance, the complex is well-positioned at the junction of Interstates 880 and 280, one of the major centers of the South Bay’s highway network. Reflecting strong preferences for amenity-rich space, renewals from tech mainstays, such as Amazon and Google, suggest that the metro’s larger players are leaning toward holding on to Class A leases, mitigating rising vacancy in this tier. Other early indicators, however, foreshadow another year of downsizing in the broader market. Sublet vacancy nearly doubled in 2023, with upward momentum carrying forward into this year. Much of this vacant space will likely be relinquished to the market, putting pressure on lower-tier offices.
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