City of Morgan Hill Economic Blueprint.docx

Over the past 15 years, a significant amount of the City’s industrial land has been converted to residential uses. In 2013, there were 293 acres of vacant industrial land available. Today Morgan Hill has only approximately 247 acres of industrial land available for development and virtually no product available for lease with historically low vacancy rates in office and R&D.

Since 2013, rents for industrial, office, and R&D space have increased significantly and the vacancy rate for office and R&D has declined dramatically. The City added 121,000 square feet of new inventory over the last five years. 3 Morgan Hill has experienced a robust amount of investment from companies choosing to expand and buy real estate in the Morgan Hill market. However, other parts of Silicon Valley are experiencing new commercial development at a far faster rate.

Figure 14. Industrial, Office, and R&D Market Statistics, 4 th Quarter 2016

Industrial, Office, and R&D Market Statistics: Morgan Hill, 4th Quarter 2016 Industrial Office R&D Building Inventory (Sq. Ft.) 2,365,493 749,932 2,874,930 Vacancy Rate 7.7% 5.2% 3.6% Average Asking Rent Per Sq. Ft.* $0.84 $2.07 $1.01 *Average asking rents for Industrial and R&D are triple net, while office is presented in full-service. Source: Colliers International, 2016.

3 Based on an analysis of CoStar data.

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