Expanding Technology Sector Fuels Demand for Office Space in San Jose

SAN JOSE, CA— After several years of restrained office construction, builders in the San Jose metro area are stepping up deliveries in response to a strengthening local economy and a resurgent technology sector, according to the 2008 National Office Report by Marcus & Millichap, the nation’s largest real estate investment services firm.

High-tech employers, including Cisco, Qualcomm and Broadcom, have continued to expand their work forces in the metro, generating tenant demand for additional space.

Also included in the report is the firm’s annual National Office Index (NOI), a snapshot analysis that ranks 43 office markets based on a series of 12-month forward-looking supply and demand indicators. San Jose moves up 11 places this year to No. 13.

“Healthy revenue gains in the local office market will continue to command investors’ attention in 2008,” says Steven J. Seligman, regional manager of Marcus & Millichap’s Palo Alto office.

Following are some of the most significant aspects of the San Jose Office Research Report:

· Employment growth is forecast to reach 0.7 percent, or 6,600 jobs, this year.
· Office completions are expected to reach 1.3 million square feet.
· Vacancy is projected to finish the year at 13.5 percent.
· Asking rents are expected to increase 5.4 percent to $32.72 per square foot, while effective rents gain 5.7 percent to $29.02 per square foot.
· Investors may want to take note of incentives offered by the local government to attract employers to downtown San Jose.

In the 2008 NOI, Seattle moved up three places to secure the No. 1 spot, surpassing last year’s leader New York City, which slipped to No. 2. Boston moved up two spots to No. 3, while San Francisco jumped 12 places to the No. 4 position. Los Angeles slipped two spots, coming in at No. 5.

For a copy of Marcus & Millichap’s National Office Report and the complete NOI rankings, visit http://www.marcusmillichap.com/.

CONTACT:

Stacey Corso
Public Relations Manager
Marcus & Millichap
2999 Oak Road
Suite 210
Walnut Creek, CA 94597
Office: 925.953.1716
Mobile: 415.672.6460
Fax: 925.953.1710
http://www.marcusmillichap.com/