Vacancy is at an all-time low, job growth fuels silicon valley market activity

• The Silicon Valley has sustained sub 3% unemployment rates since Q4 2017, a sign of a highly competitive market, causing downward pressure on vacancy. 
• Low unemployment contributes to the pressure on vacancy rates due to the expansion strategies companies implement to grow their business. 
• The spike in vacancy can be attributed to the approximately 3.7 million square feet of new construction deliveries, of which 2.2 million square feet was preleased. This leaves a slight excess of supply relative to the demand temporarily until demand for space in the Silicon Valley began to pick up again in Q2 2018. 
• Silicon Valley’s unemployment rate is down to 2.7%, lower than California’s overall rate of 4.2% and the national rate of 3.8%. This is further proof that demand for talent in the Silicon Valley continues to outpace not only other markets in the Bay Area, but the nation. 

Sources: BLS, JLL Research