Sunnyvale’s office market is rebounding faster than other Silicon Valley cities, such as Palo Alto and Mountain View. Brokers say the overhaul of Sunnyvale’s downtown is a major reason why the city is experiencing a faster rebound than its Silicon Valley peers
Across the world, office occupancy levels dropped and vacancy rates skyrocketed during the pandemic. Occupancy started to change for the better in 2023, when many white-collar employees started working in the office again. But Silicon Valley workers have been slower to return.
Despite Palo Alto’s popularity as the birthplace of Silicon Valley, it has the most vacated office market among the three cities, about 740,000 square feet as of October, according to a third-quarter market report by international brokerage firm Colliers. Mountain View faces 33,000 square feet of negative net absorption.
Similar to its peers, Sunnyvale’s vacancy rate is still double digits, around 15%, compared to a single digit rate before the pandemic. But its net absorption is a positive 1.4 million square feet, meaning more space is being leased than vacated — a clear sign of rising office demand.
Palo Alto, Mountain View and Sunnyvale are the biggest technology hubs on the south end of the San Francisco Peninsula, which is why real estate professionals often compare their office markets.