The San Jose Commercial Real Estate Market

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Commercial real estate investors and tenants alike are turning to San Jose as a promising economic center with the capacity for positive returns on capital and business investment. 

Crexi offers fast, easy access to investment-ready properties in the region and everything needed to close a deal quickly for those looking into San Jose real estate. 

Brokers with San Jose commercial property use Crexi’s robust listing marketing tools to guide deals from A to Z. To date, Crexi’s CRE technology has helped brokers close over $330 billion in property value and list over $2 trillion in assets.

Crexi proudly supports San Jose, Mountain View, Los Gatos, Campbell, Palo Alto, and the surrounding communities as the nation’s fastest-growing commercial real estate platform.

The State of San Jose Commercial Real Estate 

San Jose is the business and cultural center of Silicon Valley. It is home to major global corporations, manufacturers, unicorns, start-ups, and incubators of countless businesses. 

Located along the southern shore of San Francisco Bay in the Santa Clara Valley, San Jose is home to over 1 million residents in the city, and is notable for its innovation, affluence, cultural diversity, and mild year-round climate. Over 11 census tracts in the metro area are designated as Federal Opportunity Zones, creating opportunities for investment in newly renovated historical buildings, storefronts, and commercial/industrial developments.

San Jose Regional Breakdown

The City of San Jose has grown by 7% since 2010, about 1% higher than the population growth rate of the entire state. Santa Clara County (where San Jose is located) reported population growth of almost 9% over the same period and is home to over 1.9 million residents:

  • San Jose is home to over 1 million people and nearly 2 million in the metropolitan area.
  • Metropolitan San Jose includes the cities of Sunnyvale and Santa Clara.
  • Over the past ten years, San Jose added over 67,000 new residents over the most recent U.S. Census.
  • San Jose is the most populous city in the San Francisco Bay Area and the third most populous in California.
  • The median age in San Jose is 37.2 years, a little less than the figure in the U.S.
  • Per capita income in San Jose is $58,508, and the median household income is $129,343.
  • Over the past year, median household incomes in San Jose grew by nearly 5%, while property values increased by 2.3%.

San Jose Job Market

The tech sector in San Jose is driving economic recovery in the region, adding nearly 13,000 workers between October and November of last year. According to the U.S. Bureau of Labor Statistics, the fastest-growing employment sectors in San Jose include professional and business services, education, and health services, construction, and leisure and hospitality:

  • GDP for the San Jose-Sunnyvale-Santa Clara MSA is over $360 billion and has more than doubled since 2010.
  • San Jose has one of the highest GDPs per capita globally, along with Zurich and Oslo.
  • The unemployment rate in San Jose is down to 3.4% as of January 2022.
  • San Jose is one of only 18 United States Foreign Trade Zones.
  • Major San Jose/Santa Clara County employers include Google, Apple, Facebook, the County of Santa Clara, and Stanford University.
  • The largest industries in metropolitan San Jose are manufacturing, professional, scientific and technical services, and health care and social assistance.
  • Global tech companies headquarters in San Jose include Acer, Adobe, eBay, Hewlett Packard Enterprise, PayPal, and Zoom.
  • Other large companies located in the San Jose metropolitan area are Cisco Systems, Roku, IBM, Kaiser Permanente, Qualcomm, GlobalLogic, and TiVo.
  • Nearly 89% of the residents of San Jose are high school graduates. Over 52% hold a bachelor’s degree or an advanced degree.
  • San Jose is home to dozens of colleges and universities, including San Jose State University, Stanford University, Santa Clara University, and San Jose City College.

The transportation infrastructure of San Jose includes the local VTA light rail connecting downtown to communities such as Mountain View and Campbell, three interstate highways, and three international airports – Norman Y. Mineta San Jose International Airport, San Francisco International, and Oakland International. 

San Jose Industrial Market

Asking rents and net absorption of industrial space in San Jose are increasing, driving vacancy rates down to near-record lows. The market reported net absorption of 3.3 million square feet last year, the lowest level since 2014:

  • Total industrial inventory: 119,586,702 SF
  • Average asking rent: $1.35/SF per month, overall, NNN
  • Vacancy rate: 3.3%
  • Leasing activity: 9.4 million SF in 2021
  • Absorption: 3.3 million SF in 2021
  • Key lease transactions by tenant: Quanta Computer for 101,000 SF, Alom Technologies for 87,000 SF, Sigler Wholesale Distribution for 77,000 SF
  • New construction: 11,154 completed in 2021 with 453,000 SF currently under construction
  • Investment sales trends: $1.4 billion in Q4 2021, median sales price $444/SF, market cap rate 4.9%
  • Largest industrial submarkets: South San Jose, Fremont, North San Jose, Santa Clara

Discover San Jose industrial space for rent.

San Jose Office Market

Demand for office space in San Jose continues to be driven by tech firms, with Q4 2021 seeing the first positive net absorption since 2019. Over 900,000 square feet of office space was leased to Meta Platforms and LinkedIn in the most recent quarter, with LinkedIn also purchasing two parcels of land in Downtown San Jose earmarked for redevelopment:

  • Total office inventory: 90,591,348 SF
  • Average asking rents: $5.02/SF per month, full service gross, all classes
  • Vacancy rate: 11.3%
  • Absorption: 465,000 SF in Q4 2021
  • Key leases by tenant: Meta Platforms for 719,000 SF, LinkedIn for 194,600 SF, Western Alliance Bank for 52,000 SF
  • New construction: 1.6 million delivered in Q4 2021 with 4 million SF currently under construction
  • Investment sales trends: $1.2 billion in acquisitions in the 4th quarter, sales price $928/SF, market cap rate 5.0%.
  • Largest office submarkets: San Jose, Sunnyvale, Santa Clara 

Discover San Jose office space for lease. 

San Jose Retail Market

Both vacancy rates and retail rents in San Jose should continue to improve this year as more highly paid workers return to the office. Consumer spending in 2021 was up by double digits, and retail spending should continue to grow this year, helping to fill vacant retail space in the metro area that went dark during the pandemic:

  • Total retail inventory: 76,896,480 SF
  • Average asking rent: $39.60 per SF per year, NNN
  • Vacancy rate: 4.2%
  • Absorption: -191,708 SF in 2021
  • New construction: 213,105 SF currently under construction
  • Investment sales trends: 336 million in 2021, transaction sales price $525/SF, market cap rate 5.1%
  • Largest retail submarkets: Southern, Western, and Eastern San Jose

Discover San Jose retail property for lease.

San Jose Multifamily Market

Although the multifamily market in San Jose was disrupted by the pandemic, development and investor activity in the metro area is still going strong. There are 15 significant multifamily residential developments under construction with a total of nearly 6,000 units, with the majority located in the City of San Jose:

  • Total housing units: 688,111
  • Renter occupied: 43%
  • Average effective asking rent: $2,480
  • Rent growth: -13.5% year-over-year
  • Vacancy rate: 6.2%
  • New construction: 2,789 units delivered in 2021, with 5,932 units currently under construction
  • Investment sales trends: $563 million in Q4 2021, median sales price per unit $498,674, 3.7% average cap rate year-to-date
  • Median household income: $129,343
  • Per capita income: $58,508

Discover San Jose multifamily property for sale.

How Crexi Connects Buyers and Tenants to San Jose Commercial Real Estate

Buyers and principals seeking San Jose real estate use Crexi’s search features and populated marketplace to find their perfect property.

Tenants and investors can browse San Jose properties and sift through options by pricing, cap rate, neighborhoods, square footage, asset type, and several other parameters.

Once they’ve found the perfect San Jose property, buyers and tenants can directly connect with the broker to learn more and even submit a letter of intent (LOI) through the platform.

Intelligence Equips Investors with Data and Market Knowledge 

Crexi Intelligence cuts down on research time and aggregates key information and data for those seeking property, particularly in San Jose.

With Intelligence, buyers and sellers can access detailed property records and comps on thousands of sold assets. A detailed Insights tab displays real-time San Jose market data on every listing, such as average regional square footage, demographic insights, and foot traffic levels. 

Intelligence is available to buyers, sellers, and tenants on a subscription basis.

How San Jose Brokers Thrive with Crexi

San Jose listing agents use Crexi to market over 2300 properties for sale and lease within the metro area. San Jose’s growing commercial property opportunities are instantly available nationwide to active buyers and tenants.

Commercial agents in San Jose also harness Crexi’s marketing and listing tools to gain leads, view real-time sales insights, and boost their marketing reach to the largest audience.

San Jose commercial agents use Crexi to showcase assets across different categories, including: 

  • Offices units
  • Industrial buildings
  • Multifamily developments
  • Retail properties
  • Mixed-use buildings
  • Hospitality assets
  • Land parcels
  • Non-traditional properties such as data centers, self-storage, etc.

With Crexi, San Jose brokers navigate their clients’ assets from start to finish via one convenient platform. Brokers can even manage due diligence paperwork via Crexi’s secure file storage. 

These tools are free for all brokers, but Crexi’s true power appears with Sale PRO, Lease PRO, and All PRO

Crexi PRO Dashboard 2020

Crexi’s All PRO Membership

Crexi PRO enhances broker workflows with automated marketing tools and processes to help expand their reach and close more deals. San Jose brokers enjoy improved access to detailed lead contacts. They can also easily report their progress to clients with automated branded reports. Crexi PRO simplifies operational workflows and frees up brokers to do what they do best: build connections and win deals.

PRO uses machine-learning-powered automation tools to connect San Jose properties with relevant, active buyers and tenants. PRO properties enjoy preferential placement at the top of curated results pages, seen by thousands of active property seekers based on their search behavior.

Crexi also emails weekly marketing blasts, curating lists of PRO properties that receive a 10-15% higher engagement rate than industry benchmarks.

Crexi PRO users enjoy unlimited access to Intelligence’s library and research features at no added cost.

With Crexi PRO, brokers can easily engage with the more than 12.5 million leads nationwide who searched using Crexi in 2021. On average, Crexi PRO users successfully win 125% more leads and close up to eight times more deals than non-PRO users. 

Contact to learn more about All PRO.

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Shanti Ryle
Shanti Ryle

Content Marketing Manager

Shanti leads Crexi's content marketing strategies with 7+ years of content development experience, creating everything from blog posts to award-winning podcasts. Previously, she worked on content teams at Snapchat, Weedmaps, and HopSkipDrive as well as developed copy, articles, and media for freelance publications.

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