SAN JOSE — Major tech deals are helping to keep the South Bay office vacancy rate from rising, while markets in San Francisco and Oakland are struggling with high levels of empty spaces, new real estate surveys show.
During the July-through-September third quarter of 2025, the office vacancy level in the South Bay was the lowest of the three biggest Bay Area markets, according to reports prepared by commercial real estate firm Colliers.
The firm defines the South Bay as Santa Clara County and Fremont. It defines the Greater Oakland Metro Area as Oakland, Berkeley, Emeryville, Alameda and Richmond. The San Francisco report focused on the major business districts on the eastern side.
In the third quarter, the South Bay had an office vacancy rate of 15.9%, the Colliers report determined. Equal to the second quarter rate, it was below the 17.2% rate during the third quarter of 2024.
The Oakland-Berkeley-Alameda-Emerville-Richmond areas had a 21.4% office vacancy rate in the third quarter, which was higher than the 20.8% level in the second quarter and unchanged from the third quarter of 2024, according to the Colliers report.
San Francisco’s office vacancy rate was 31.1% in the third quarter, slightly improved from the 31.2% rate in the second quarter but worse than the 30.7% rate in 2024.
The South Bay is showing steady improvement, Colliers researchers Mike Pham, Mithila Chitale and Derek Daniels stated in the report.
“The Silicon Valley office market continued its upward trajectory in the third quarter of 2025,” the researchers stated.
In the South Bay, tenants have begun to scout for large chunks of office space to a greater degree than in prior quarters, according to Colliers.
“Office tenant requirements have increased 52.1% to 6.7 million square feet” during the most recent 12 months, Colliers said in its third-quarter report. The real estate firm added that this is a level of tenant interest “not seen since 2022.”
The tech industry is playing a huge factor.
“Technology firms comprise 80.1% of that office demand figure,” the Colliers researchers stated.
Downtown Sunnyvale became a hotbed for lease deals during the third quarter.
Databricks, an artificial intelligence tech firm, signed a lease for 305,400 square feet to take over a full building; Crowdstrike, also an AI tech company, leased 90,700 square feet; and Grail, a biotech firm, leased 75,600 square feet.
Apple also helped to bolster the South Bay market with a remarkable string of purchases of office buildings the company was leasing. Apple’s most recent deal, completed in September, meant the iPhone maker has spent $881.9 million in an office shopping spree this year alone.
During the first nine months of 2025, tenants have signed eight new leases — leases that weren’t renewals of a prior rental agreement — that topped 100,000 square feet. Seven such new leases occurred in 2024, and five took place in 2023.
“Strong tenant demand, high levels of venture capital funding, and a revival of downtown submarkets suggest that the office sector will continue to lead the South Bay through the end of 2025 and throughout 2026,” Colliers reported.