2011 Index of Silicon Valley - Silicon Valley Community Foundation

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Commercial Space Vacancy rates have slowed across all sectors as business closings decline and confidence builds. PLACE Commercial Space Change in Supply of Commercial Space Santa Clara County WHY IS THIS IMPORTANT This indicator tracks the supply of commercial space, rates of commercial vacancy and cost, and new development, which are leading indicators of regional economic activity. In addition to office space, commercial space includes R&D, industrial, and warehouse space. The change in the supply of commercial space, expressed as the absorption rate, reflects the amount of space rented, becoming available, and added through new construction. Gross absorption is a measure for total activity over a period while net absorption is the outcome. A negative change in the supply of commercial space shows a tightening in the commercial real estate market. The vacancy rate measures the amount of space that is not occupied. Increases in vacancy, as well as declines in rents, reflect slowing demand relative to supply. Space Added/Absorbed (million sq. ft.) 20 15 10 5 0 -5 -10 -15 -20 1998 1999 2000 2001 2002 New Construction Added 2003 2004 2005 2006 Net Absorption 2007 2008 2009 * 2010 Net Change in Supply of Commercial Space HOW ARE WE DOING Early reporting indicates a strong turnaround in vacancy rates in the fourth quarter of 2010 (fourth quarter data was not available for this analysis). Primarily driven by the decrease in new commercial construction (down by 80 percent from 2009) and a four percent increase in gross absorption in the past year, the amount of space available continued to expand in 2010 (as of October) but at a rate 59 percent slower than in 2009. After jumping three percent in each of the preceding years, vacancy rates across all commercial space sectors increased by just 0.5 percent from 2009 to 2010 (as of October). By sector, vacancy rates in R&D space continued the strongest growth of 0.9 percent while all other sectors remained relatively unchanged from the previous year. Across all sectors, adjusted rents declined from 2008 to 2009: R&D (18%), Office (14%), Warehouse (9%), and Industrial (7%). As of October 2010, 343,000 square feet of new commercial space construction had been added in Santa Clara County. Representing an 80 percent drop from 2009, all of this added new space was in office space. * As of October 2010 Data Source: Colliers International Analysis: Collaborative Economics 25% 20% 15% 10% 5% 0% Commercial Vacancy Annual Rate of Commercial Vacancy Santa Clara County 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 1999 2010 2009 * All Commercial Space Office R&D Industrial * As of October 2010 Data Source: Colliers International Analysis: Collaborative Economics Warehouse 56
$9 8 Commercial Rents Annual Average Asking Rents Santa Clara County About the 2011 Index | 01 Map of Silicon Valley 02 | Table of Contents | 03 Index 2011 Highlights 04 | 05 Index at a Glance 06 | 07 Special Analysis 08 | 11 Dollars per Square Foot 7 6 5 4 2 PEOPLE 12 | 15 ECONOMY 16 | 31 1 0 1998 2000 2001 2002 2003 2004 2005 2006 2008 By Sector Santa Clara County SOCIETY 32 | 43 6 5 3 2 Environment 44–45 Transportation 46-49 Land Use 50-51 PLACE 1998 2000 2001 2007 2010 1 2002 1999 2009 Office R&D Industrial Warehouse * As of October 2010 Data Source: Colliers International Analysis: Collaborative Economics New Commercial Development Millions of Square Feet 4 1999 2003 2004 2005 * 0 2006 2007 2008 2009 * 2010 Housing 52-55 Office R&D Industrial Warehouse *As of October 2010 Data Source: Colliers International Analysis: Collaborative Economics Commercial Space 56-57 Special Analysis cont. 58 | 67 Appendices 68 | 72 Acknowledgments | 73 57
Page 1 and 2:
i n d e x OF SILICON VALLEY 2011 PE
Page 3 and 4:
ABOUT THE 2011 SILICON VALLEY INDEX
Page 5 and 6:
TABLE OF CONTENTS 2011 INDEX HIGHLI
Page 7 and 8: Attracting talent from abroad is im
Page 9 and 10: SOCIETY Educational and health outc
Page 11 and 12: Special Analysis The Crisis in Loca
Page 13 and 14: Silicon Valley’s experience has m
Page 15 and 16: 40,000 Net Migration Flows Foreign
Page 17 and 18: Science & Engineering Degrees Confe
Page 19 and 20: MY Employment Total Employed Reside
Page 21 and 22: MY Total Number of Jobs in Employme
Page 23 and 24: MY 12,000 10,000 Patent Registratio
Page 25 and 26: MY Billions of Dollars Invested (In
Page 27 and 28: MY 0.5% 0.4% Percent of Population
Page 29 and 30: MY 100% 90% 80% Percentage of Nonem
Page 31 and 32: MY Per Capita Income (Inflation Adj
Page 33 and 34: MY Perfect Income Inequality = Gini
Page 35 and 36: Percentage of Eighth Graders Tested
Page 37 and 38: 50% 45% 40% Percent of Students Rec
Page 39 and 40: Vibrant Nightlife San Jose-Sunnyval
Page 41 and 42: Percentage of Population with Healt
Page 43 and 44: Teen Births Teen Births per 1,000 F
Page 45 and 46: Number of Drug and Alcohol Rehabili
Page 47 and 48: Per Capita Water Consumption % Chan
Page 49 and 50: Fuel Consumption per Capita San Mat
Page 51 and 52: About the 2011 Index | 01 Map of Si
Page 53 and 54: 80% 70% 60% 50% Housing Near Transi
Page 55 and 56: Average Rent (Inflation Adjusted) A
Page 57: 10,000 9,000 8,000 7,000 6,000 5,00
Page 61 and 62: Figure 2-2 $4.0 City Revenue Aggreg
Page 63 and 64: These trends indicate that all majo
Page 65 and 66: Trends in County Revenue and Expend
Page 67 and 68: County Expenditures In terms of cou
Page 69 and 70: Based on San Mateo County June 2010
Page 71 and 72: Establishment Churn The National Es
Page 73 and 74: Time Required for Permitting of Ren
Page 75 and 76: ACKNOWLEDGMENTS Special thanks to t
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2011 Index of Silicon Valley - Silicon Valley Community Foundation

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