Silicon Valley office market shows signs of life, but vacancies remain stubbornly high

AN UPTICK IN LEASING ACTIVITY in Silicon Valley’s commercial real estate market has offered a glimmer of hope that a stronger post-pandemic economic recovery may be taking hold. But market watchers caution that high office vacancies are likely to remain for years to come.

The rate of commercial lease deals over the first quarter of the year hit the highest level seen in the region since 2022, according to the most recent market analysis from Joint Venture Silicon Valley, a local think tank. At the same time, office vacancy rates in the South Bay remain at 22.5%, even higher than levels seen during the early 2000s dot-com bust and more than twice what was seen just prior to the pandemic.