Silicon Valley, New York City Have Submarkets With Nation's Highest Office Rents

Sand Hill Road in Menlo Park is the most expensive office rental submarket in the country, with Silicon Valley and Manhattan home to the submarkets that dominate the nation's highest asking rents, according to a recent report by Cushman & Wakefield.

Asking rents in Sand Hill Road go for a whopping $130/SF in the area, which has about 1.1M SF in 28 buildings filled with venture capital firms. Downtown Palo Alto came in second with rents of $126/SF and has the lowest vacancy rate among the top markets at 5%. A newly completed 22k SF building at 550 High St is renting space at $144/SF on a triple-net basis.

Menlo Park’s Middlefield may be the smallest submarkets in the report, but it has the third-highest asking rents at $124/SF. Local tenants include Merrill Lynch and Barclays, but the area has the highest vacancy rate on the list at 22.7% due to the empty 95k SF building formerly housed by Sunset Magazine. Other Silicon Valley markets on the list include Downtown Mountain View, Stanford Research Park and California Avenue in Palo Alto.

Park Avenue, New York City, Manhattan
Midtown's office buildings remain largely empty amid the pandemic

In New York, Manhattan’s Park Avenue comes in fourth with asking rents of $105/SF. Compared to the smaller markets in Silicon Valley, Park Avenue has 21.8M SF across 30 exclusive buildings. Financial firms, including international banks, reign supreme here. Madison/Fifth also has high rents at $104/SF, but there’s plenty of space with 21.1M SF of inventory in 74 buildings. Meanwhile, tenants with views of Central Park can expect asking rents as high as $200/SF. Other Manhattan submarkets with high rents include Sixth Avenue/Rock Center and Soho.

Connecticut’s Greenwich CBD in Fairfield County is the only area outside of New York and Silicon Valley to make the list. Asking rents are $94/SF and the area houses financial service tenants.

Comparatively, national rents average $35/SF.

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