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Market Report

San Jose Multifamily Investment Forecast

2022 Outlook

Tech Firms Eventual Return to Campuses Attracting Apartment Renters and Investors

Anchor employers set stage for another strong year. The eventual return of Google and Apple workers to offices will support more gains in apartment fundamentals. Vacancy retreated to pre-health crisis levels late last year as remote workers moved back in preparation for a return to campuses. The early rebound relative to adjacent San Francisco is partially due to Google's delayed announcement that offices would not fully reopen until 2022 because of the delta variant. Smaller tech firms that contract with the tech giants take their cues from them, inevitably recalling their own employees in late 2021. Due to low vacancy entering the year and the construction pipeline moderating in 2022, rent growth will be the primary source of fundamental gains in the coming months in the Class A segment. South Sunnyvale-Cupertino and West San Jose-Campbell, where vacancy is already well below 3 percent, hold the strongest prospects for top-tier rent gains in the coming year. There are a few areas with room for Class A vacancy improvement. Mountain View-Palo Alto-Los Altos and Santa Clara have above-average availability and strong renter demand is anticipated in the coming months.

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