Sunnyvale has recently experienced a significant decline in office vacancy rates, dropping to 10.3%. This marks the steepest decline among submarkets in Silicon Valley, signaling a strengthening demand for office space in the area. A notable example of this trend is the leasing of a former LinkedIn office, which had been vacant for several years, to MBZUAI’s Institute of Foundation Models, which leased 27,000 square feet in Sunnyvale’s Peery Park 1.
In San Jose, the commercial real estate market is also showing signs of vitality, with several active transactions highlighting ongoing investment interest. The San Jose Sharks recently purchased a 23,000 square foot office building located at 450 W. Santa Clara St. near the SAP Center for approximately $10 million 2. Additionally, TMG Partners secured a $232 million loan for a project overhaul, further underscoring the robust interest in both office and mixed-use properties in the region 3.
On the multifamily front, Prometheus Real Estate Group's acquisition of a 93-unit townhome community in Sunnyvale for $55.9 million reflects continued investment in this sector 4. However, the overall multifamily cap rate in San Jose remains stable at 4.91%, indicating a competitive market environment [IntellCRE].
These developments in both Sunnyvale and San Jose illustrate a dynamic commercial real estate landscape, characterized by declining vacancy rates in office spaces and active investment transactions across various property types.
Sources
- The Registry (Bay Area) — MBZUAI’s Institute of Foundation Models Leases 27,000 SQFT Former LinkedIn Office in Sunnyvale’s Peery Park
- The Registry (Bay Area) — San Jose Sharks Buy 23,000 SQFT Office Building at 450 W. Santa Clara St. Near SAP Center for About $10MM
- The Registry (Bay Area) — TMG Partners, KKR Secure $232MM County Loan at 3.8% for $271MM Skyport Plaza Overhaul in San Jose
- The Registry (Bay Area) — Prometheus Acquires 93-Unit Bellflower Townhome Community in Sunnyvale from Sack Capital Partners for $55.9MM