San Jose Retail Market Report

San Jose remains the least volatile Bay Area market. Unlike San Francisco and Oakland, where vacancy rates will end this year roughly double their 2018 troughs, San Jose has been a relative beacon of stability this cycle. Limited development activity and a local economy anchored by tech employment and higher-income households have helped insulate the market. Despite ongoing reports of tech layoffs, affluent Silicon Valley residents continue to support restaurants, boutiques, and experiential retail. Palo Alto, Santa Clara, Sunnyvale-Cupertino, and Campbell-Los Gatos all entered 2026 with sub-4 percent vacancy rates, the lowest in the metro. While Mountain View-Los Altos and North San Jose saw vacancy upticks last year following big-box move-outs, backfilling prospects for larger spaces are improving. For example, the planned replacement of Best Buy at Santana Row with a luxury fitness concept underscores sustained interest in the adaptive reuse of well-positioned spaces.