Economy: Headwinds Persist
The East Bay, consisting of Alameda and Contra Costa counties, recorded a gain of 3,000 jobs year-over-year (YOY) bringing the unemployment rate down 40 basis points (bps) to 4.4%. Macroeconomic forces including elevated interest rates, evolving tariff policies and global trade uncertainty continue to weigh on industrial leasing but significant demand from advanced manufacturing users and tenants supporting AI infrastructure has provided some relief.
Supply & Demand: Vacancy Falls
The vacancy rate in the East Bay Pleasanton or Tri Valley market closed the third quarter at 7.3%, down 210 bps from the previous quarter and 160 bps YOY. The third quarter recorded 472,861 square feet (sf) of positive net absorption, the result of large leases from earlier in the year occupying. This brings the year-to-date total net absorption to over 1.1 million sf, making it the best year since 2016 as it stands. Available spaces of all size ranges, aside from 50,000-99,999 sf, have decreased or remain flat YOY, with the total number of availabilities down 17%.
Leasing activity lost some momentum in the third quarter, with 124,256 sf of total leasing, after two historically strong quarters to start the year. Through the third quarter, the market has recorded 2.3 million sf of leasing, the most in any single year since 2016, with the potential to end the year with the most in recorded history. The largest deal of the quarter was signed at 151 Lawrence Drive in Livermore, where Generon leased 56,800 sf. Tri-Valley industrial leasing has begun to benefit from Silicon Valley spillover, as tenants in advanced manufacturing, mobility, and other technology forward industries look east as they are squeezed out of the inner Bay Area by surging AI and hyperscaler demand. For the tenth consecutive quarter, the largest lease was in Livermore, which houses all of the region's newer, big-box inventory. The submarket commanded 88% of all leasing activity in 2025 and 98% through the third quarter of 2026, while making up 80% of the total inventory.
The overall asking rate closed the third quarter at $1.23 per square foot (psf) on a monthly triple net basis, up $0.03 psf from the previous quarter and $0.04 psf YOY. While the delta between asking rates in the Tri-Valley and Oakland Metro has become increasingly narrow, tenants can still find cost savings in the Tri-Valley, while staying closer to major population centers than the Central Valley to the east.
Other News: User Sales
Despite strong leasing fundamentals thus far in 2026, there have been no major investment sales. Users have taken the spotlight with several smaller purchases this year. The largest sale thus far was 6998 Sierra Court, which general contractor Courtney, Inc. purchased for $5.5M, or $340 psf.
