The office vacancy rate in downtown San Jose improved to 28.9% in Q2 2025, down from 30.9% in Q1. In contrast, San Francisco's and Oakland's rates worsened, with Oakland reaching 37.2% and San Francisco at 34.8%. The positive trend in San Jose was significantly influenced by a major purchase of a tower by the Santa Clara Valley Transportation Authority. Moreover, the local office market is benefiting from occupants purchasing properties and residential conversions reducing office inventory, showcasing a shift towards stabilization in downtown San Jose.
Downtown San Jose's office vacancy rate was 28.9% in the second quarter, an improvement from 30.9% in the first quarter, indicating a positive trend in the market.
The purchase of a tower by the Santa Clara Valley Transportation Authority for $63.7 million significantly contributed to the uptick in downtown San Jose's office market.
Commercial property experts do not consider a building as vacant if it's bought by the organization that will also occupy it, which affects vacancy calculations.
Cushman & Wakefield reported that downtown San Jose is filling empty space at a greater pace than offices are becoming empty, demonstrating net absorption.
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