Rapidly evolving COVID-19 crisis shuts down Bay Area as quarter ends
The COVID-19 crisis has transformed life in Santa Clara County and the surrounding areas. The Bay Area was the first region to take unprecedented measures to slow the spread of the novel coronavirus. In February, the region declared a state of emergency and by mid-March was the first major metro area to institute a shelter-in-place order, bringing a halt to a majority of businesses. Santa Clara County has been the hardest hit area in the general Bay Area. The impact to the market will be significant and the severity is dependent on how long the current circumstances extend. Ahead of any pandemic-related impact, the market saw some softening as quarterly leasing activity dropped to 1.6 million square feet (msf), down almost 300,000 sf from Q4 2019. Overall availability remained stable at 14.4% and overall asking rents saw a slight 0.8% drop to $4.90 per square foot (psf) monthly from the previous quarter. Similarly, Class A rents rose nominally to $5.65 psf monthly and Class A availability dropped 80 basis points to 16.3% over the same period.