Mixed Signals
If there is any sector of our shaky economy that is sending mixed signals, it is the commercial real estate market. While, by any measure, the broader markets have seen substantive improvement over the past twelve months, leasing activity remains well below average levels. At the same time as lease rates for R&D space in the area slide to levels not seen since the third quarter of 2006, rents have shown noteworthy growth in some submarkets, particularly in the past two quarters.

The office vacancy rate for San Mateo County currently stands at 18.4%, a nominal improvement over last quarter's 18.8%, but a marked change from a year ago, when the rate stood at 19.9%. The Greater Peninsula's vacancy rate of 17.0% also represents a strong improvement over the prior year's 18.4% rate. While these statistics are a clear indicator of an improvement from the bottom seen a year ago, the broad markets remain sluggish.

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