The Fremont industrial market remains a critical hub within the East Bay and gateway to Silicon Valley. Characterized by its large flex inventory, proximity to Silicon Valley, and concentration of logistics and advanced manufacturing users. While demand has softened compared to recent years, the submarket continues to outperform in rent growth relative to the broader East Bay.
Fremont remains one of the East Bay’s stronger submarkets, but softer absorption and new deliveries will put upward pressure on vacancy. Owners should focus on tenant retention, competitive concessions, and asset positioning to maintain NOI as the market normalizes.
Market Indicators – Fremont Industrial
Indicator
Q1 2024
12-Month Net Absorption
(343,000) SF (negative)
Vacancy Rate
5.0% (up 90 bps YoY)
Average Asking Rent
$18.38/SF, up 2.2% YoY
Inventory
44.8 million SF
12-Month Deliveries
50,700 SF
Under Construction
1.3 million SF
Vacancy & Absorption
Fremont’s vacancy rose to 5.0%, slightly higher than the East Bay average of 4.9%.
The market recorded 340,000 SF of negative net absorption over the past 12 months, reflecting slower leasing velocity and some backfill challenges.
Availability sits at 6.5%, including sublease space, signaling more options for tenants and longer lease-up periods for landlords
Rent Trends
Asking rents in Fremont are averaging $18.40/SF, outpacing the East Bay average of $16.80/SF.
Over the last three years, Fremont rents have climbed 12% cumulatively, supported by strong tech and advanced manufacturing demand.
Flex space commands the highest rents at $20.96/SF, compared to logistics at $16.64/SF and specialized industrial at $16.86/SFFremont-Industrial-Submarket-20….
Construction
Approximately 1.3 million SF is under construction, equal to 2.9% of total inventory.
The pipeline includes major projects such as Lennar’s 703,000 SF Warm Springs development and Link Logistics’ 210,000 SF on Kato Road.
Deliveries have been modest in the past year, with just 51,000 SF completed, limiting near-term supply pressureFremont-Industrial-Submarket-20….
Sales & Investment Market
46 sales closed in the past 12 months with an average price of $340/SF, while overall market valuation is pegged at $317/SF.
Flex properties made up more than half of sales, mirroring Fremont’s asset mix consisting of logistics, R&D, and flex product types.
The market cap rate averages 5.5%, slightly above its three-year average of 5.0%, indicating modest softening in pricing expectationsFremont-Industrial-Submarket-20….
Owner Takeaways
More tenant leverage: Rising availability and negative absorption give tenants more options, slowing rent escalations despite higher average asking rents.
Rent resilience: Fremont continues to command a premium versus the broader East Bay, reflecting its strategic location and tenant base.
Capital markets: Investor appetite remains healthy, but pricing has adjusted upward with cap rates widening to mid-5% levels.
Pipeline impact: With over 1.3M SF under construction, owners should plan for continued competition in lease-up through 2024.
Empowering Landlords and Businesses Across Silicon Valley 
Leave a comment