Silicon Valley Retail Market Report

The following reflects Silicon Valley retail market conditions as of Q3 2026.

The Silicon Valley retail market in Q3 2026 saw vacancy and unemployment both decline year-over-year, average asking rents hold steady, and construction deliveries fall compared to the prior year. Explore our full Silicon Valley retail market report for deeper insights into leasing activity, investment performance, and development trends across the region.

Frequently Asked Questions

What is the retail vacancy rate in Silicon Valley in Q3 2026?

The Silicon Valley retail vacancy rate was 3.2% in Q3 2026, according to Kidder Mathews research. This is up slightly from 3.1% in Q2 2026 but down 80 basis points from 4.0% a year earlier in Q3 2025 (Data source: CoStar).

What are average retail asking rents in Silicon Valley?

Average retail asking rents in Silicon Valley were $3.06 per SF per year in Q3 2026, essentially unchanged from $3.06 a year earlier in Q3 2025 and roughly flat versus $3.07 in Q2 2026 (Data source: CoStar). Rents have held steady over the past year despite a decline in vacancy.

What was net absorption for Silicon Valley retail in Q3 2026?

Silicon Valley retail recorded negative net absorption of -69,156 SF in Q3 2026, meaning tenants vacated more space than they occupied during the quarter, according to Kidder Mathews research. Year-to-date net absorption for 2026 stands at a positive 586,323 SF, compared to -248,993 SF over the same period in 2025 (Data source: CoStar).

How much retail space is under construction in Silicon Valley?

There was no retail space under construction in Silicon Valley as of Q3 2026, according to Kidder Mathews research. This compares to 60,285 SF under construction in Q3 2025. The only significant project tracked for delivery is a 83,635 SF property at 1200 E Park St in San Benito County, slated for delivery in Q4 2026 (Data source: CoStar).

What was the largest retail sale transaction in Silicon Valley in Q3 2026?

The largest retail sale transaction in Silicon Valley in Q3 2026 was the Whole Foods Market property in Los Gatos/Saratoga, a 43,130 SF asset that sold for $45,900,000, or $1,064.22 per SF, according to Kidder Mathews research. Sunhill Corporation purchased the property from Sand Hill Property Company (Data source: CoStar).

What was the largest retail lease signed in Silicon Valley in Q3 2026?

The largest retail lease signed in Silicon Valley in Q3 2026 was Dick’s Sporting Goods at Hillview Plaza in South San Jose, a 97,920 SF lease transacted in July 2026, according to Kidder Mathews research. Sprouts Farmers Market, Inc. also signed a notable 37,460 SF lease at 5651 Cottle Rd in South San Jose in September 2026 (Data source: CoStar).

How have retail cap rates and sale prices trended in Silicon Valley?

The average retail cap rate in Silicon Valley was 6.0% in Q3 2026, up 10 basis points from 5.9% in Q3 2025, according to Kidder Mathews research. Meanwhile, average sale price per SF rose sharply to $383 in Q3 2026, a 17.97% increase from $325 a year earlier, though down from $472 in Q2 2026 (Data source: CoStar).

What is the outlook for the Silicon Valley retail market?

The Silicon Valley retail market enters the next quarter with historically low vacancy, stable rents, and a thin construction pipeline, according to Kidder Mathews research. With no new retail space under construction as of Q3 2026, limited new supply is likely to keep vacancy tight even as leasing activity fluctuates quarter to quarter (Data source: CoStar).

Last updated: Q3 2026. Data source: CoStar. Compiled by the Kidder Mathews Research Group.

Q3 2026 Silicon Valley Retail Market: Key Data Points

Explore our full Silicon Valley retail market review for deeper insights into leasing trends, sale activity, and submarket performance.

• Vacancy Rate: Retail vacancy in Silicon Valley was 3.2% in Q3 2026, down 80 basis points from 4.0% in Q3 2025.
• Average Asking Rents: Average asking rents held steady at $3.06 per SF per year in Q3 2026, virtually unchanged from a year earlier.
• Net Absorption: The market posted negative net absorption of -69,156 SF in Q3 2026, though 2026 year-to-date absorption remains positive at 586,323 SF.
• Construction Activity: No new retail space was under construction as of Q3 2026, down from 60,285 SF a year earlier; one 83,635 SF project in San Benito County is slated to deliver in Q4 2026.
• Investment Sales: Average sale price rose to $383 per SF in Q3 2026, up 17.97% year-over-year, while the average cap rate ticked up to 6.0%.
• Notable Transactions: The Whole Foods Market sale in Los Gatos/Saratoga ($45.9 million, $1,064.22/SF) led sale activity, while Dick’s Sporting Goods signed the quarter’s largest lease at Hillview Plaza in South San Jose (97,920 SF).

Market Breakdown — Quarterly Comparison

Market Breakdown — Year-to-Date Comparison

Significant Sale Transactions Q3 2026

Significant Lease Transactions Q3 2026

Significant Under Construction