Central Valley Office Figures Q3 2026

The Central Valley office market closed Q3 2026 with a base inventory of 9.55 million sq. ft. and improving fundamentals. Vacancy fell 40 bps quarter-over-quarter to 5.3%, availability edged down to 6.7%, and the average direct asking rate rose $0.04 to $1.70 FSG. Net absorption totaled a positive 36,000 sq. ft., reversing a loss of 32,000 sq. ft. in Q2 and bringing year-to-date absorption back into positive territory at about 1,000 sq. ft.

Tenant demand remains healthy, with general office, light medical, and professional services users competing for limited quality Class A and B space. Owners are pushing rents with success in those classes. No new space delivered this quarter, and no projects are under construction, as construction costs continue to outpace achievable rents. Investment sales were driven by owner-users, as higher interest rates kept most investors on the sidelines.