Silicon Valley Industrial Market Report Q1 2026

Silicon Valley's industrial market in first quarter 2026 shows divergent trends between industrial and warehouse segments, with industrial direct vacancy falling 60 basis points to 4.3% while warehouse vacancy rose 60 basis points to 5.6%, the highest in over three years. Asking lease rates for industrial properties declined 5.8% year-over-year to $1.80 per square foot, while warehouse rates rose 0.6% to $1.57, with both remaining above five-year averages; industrial leasing activity increased 4.3% year-to-date, but warehouse leasing declined 57.0%, reflecting uneven recovery concentrated in advanced manufacturing and technology-adjacent users rather than broad-based demand.