Silicon Valley's office leasing market has reached its strongest levels since 2019, with significant demand from AI-driven tenants for Class A space. According to ConnectCRE, this surge indicates a robust recovery in the office market, particularly in San Jose, which is part of the broader Silicon Valley area 2.
The industrial and research-and-development (R&D) markets in Silicon Valley are also showing signs of recovery. There has been notable absorption of large blocks of space by tenants in AI and advanced manufacturing, suggesting a positive shift in commercial real estate fundamentals in the region 4.
A key highlight in the R&D sector is the recent lease signed by Infinera Corporation for 102,280 square feet in South San Jose. This transaction marks the largest R&D lease of the quarter and reflects renewed activity in the sector, contributing to the overall recovery of the commercial real estate market 3.
In addition to the growth in office and R&D spaces, educational infrastructure is also expanding in San Jose. Presentation High School has filed for a phased expansion of its campus, proposing an additional 31,513 square feet of construction. This development underscores ongoing investment in educational facilities within the region 1.
Overall, the commercial real estate landscape in San Jose is experiencing a revitalization, driven by demand across various sectors, including office, industrial, and education. As these trends continue, they signal a promising outlook for the future of commercial real estate in Silicon Valley.
Sources
- The Registry (Bay Area) — Presentation High School Files for 32,000 SQFT Phased Expansion of Willow Glen Campus in San Jose
- The Registry (Bay Area) — Silicon Valley Office Leasing Roars Back to Post-Pandemic High as Class A Space Tightens
- The Registry (Bay Area) — Infinera Signs 102,000 SQFT R&D Lease at 6375 San Ignacio Avenue in South San Jose
- The Registry (Bay Area) — Silicon Valley Industrial Hits Cycle-High Leasing as R&D Market Turns the Corner in 2Q26