Silicon Valley is currently projected to be a hot market for commercial real estate development and transactions as the coronavirus slump in business begins to dissipate with the release of multiple vaccines and new health and safety protocols implemented by the new administration in the White House.
The San Jose metropolitan area, defined as Santa Clara County, is known as the nation’s number one market for the future development of commercial office spaces. It’s also being looked at as an amazing market for retail and apartment development as well. This shift is likely going to be partially caused by a greater desire to leave the suburbs after the pandemic and get back to the hustle and bustle of city life.
The East Bay and San Francisco-San Mateo metro regions are also being seen as prime spots for future office, retail, and apartment development, according to a report published by CBRE, a commercial real estate firm. Senior Manager at CBRE’s Silicon Valley office, Mark Schmidt, recently discussed this projected rise with the media.
“Companies appreciate that a San Jose-area location is accessible to a wide swath of top-tier talent and affords room to grow.”
The report ranked which of the 50 major markets in the US offered the best potential development opportunities post-Covid. The report considered all property types – office, retail, multifamily, and industrial – as well as all contributing factors to cost, such as land and construction. Santa Clara County was ranked at number 17 nationwide for development opportunities.
The San Francisco-San Mateoregion was ranked at number 22 and the East Bay ranked at number 23. Santa Clara County is ranked as the best region for office development opportunities, according to CBRE’s data and report; the group ranked the area as number 1 out of 50 metro areas in the US.
The South Bay also trumped other major office markets such as New York City, Chicago, Seattle, and Austin. The East Bay was ranked at number 16 for industrial development opportunities, number 20 for office, number 21 for retail, and number 26 for multifamily opportunities.
“The East Bay has benefited as the more affordable neighbor of San Francisco, with industry advantages in information technology, professional business services, and a sizable construction labor force.”
CBRE is projecting that “the San Jose metro area will have the fastest growing economy post-recession, driven by an unparalleled high-tech ecosystem that takes advantage of research universities, abundant capital, and a strong start-up and entrepreneurial culture. New commercial properties will require enhanced amenities. Developers are prioritizing new features that promote health and safety, tenant flexibility and ease of access in response to COVID-related concerns.”
Nationwide the hopeful end of the Covid-19 pandemic is expected to shift the way a lot of industries develop and expand in the future. Time will tell how accurate these projections actually are, but based on past economic data, the US’s real estate industry should do just fine this year.
Eric Mastrota is a Contributing Editor at The National Digest based in New York. A graduate of SUNY New Paltz, he reports on world news, culture, and lifestyle. You can reach him at email@example.com.