San Mateo County Office, Multifamily Rents Reaching New Heights
San Mateo County is emerging as an ideal office and multifamily market and rents are reaching all-time highs. Class-A office rents spiked at $6.02/SF in downtown markets so far this year, based on data from Avison Young. Suburban office markets have already surpassed $4.29/SF. Vacancy rates also have fallen in both markets, with suburban vacancy at just over 8% and downtown markets at 2.9%.
Average office sales in downtown markets are closing in on nearly $1k/SF so far this year, an increase of 123%, or $523/SF, since 2013. Suburban office deals are averaging about $400/SF. In San Mateo, Prometheus sold The Atrium for $61.6M ($376/SF) earlier this year.
Avison Young projects suburban office markets will overtake downtown markets with 3M SF delivered by 2018 compared to less than 500k SF in downtown regions. About 89% of office development is taking place in suburban markets.
Redwood City is the most active area for development in both downtown and suburban markets. It has over 30 office, mixed-use and multifamily projects at various stages of development, including a four-building office expansion for Stanford.
Multifamily is also thriving in the county, with nearly 1,500 units completed since 2013 after nearly no new development during 2010-2013. Rents have been slowly climbing since 2010, reaching over $3k in downtown sectors and over $2,500 in suburbia.
