San Jose, CA Economic Overview
With over two million residents, San Jose is the largest city in Northern California, and the third-most populous after Los Angeles and San Diego. Home to the world-renowned Silicon Valley, San Jose is known as a global city, most noted for its high cost of living, affluence, and location within the booming high tech industry. Nicknamed the 'Capital of Silicon Valley' San Jose has the third-highest GDP per capita in the world, after Zurich, Switzerland and Oslo. The sprawling metro area of San Jose is filled with high rise buildings, large tech campuses and tree-lined suburban neighborhoods. Major players in the global technology arena, such as Cisco Systems, eBay, Adobe Systems, PayPal, Samsung, and Acer guarantee that San Jose is practically recession proof and that the demand for commercial real estate in San Jose will be phenomenally strong for years to come.
As the capital of Silicon Valley, San Jose's economy is driven by the dense concentration of high-technology computer, engineering and microprocessing companies that are located within its borders. This, combined with the City's closeness to other high tech headquarters in Silicon Valley, such as Google in Mountain View, and Apple in Cupertino, ensure that the economy in San Jose will continue to be one of the world's strongest.
Private capital from around the world flows into San Jose at an unprecedented pace. Nearly 35% of all venture capital funds in the U.S. are invested in Silicon Valley and in San Jose. The workforce is so productive here that the United States Patent and Trademark Office had to open a satellite office in San Jose to process all of the patents produced - more than any other city in the United States.
San Jose, CA Commercial Real Estate Market
The business districts in San Jose are Downtown, North San Jose, South San Jose, and West San Jose. Here's a quick snapshot of some of the major contributors to the booming commercial real estate markets in San Jose: Downtown San Jose is one of the preeminent urban live-work centers to be found anywhere in the world, and attracts a highly-talented workforce, due to its amenities and easy access to transportation. Companies such as Adobe, Ernst & Young, Deloitte, Pinger, Oracle and over 100 other high-tech companies call Downtown San Jose home. Google is currently working with the City to purchase and develop an astounding 8 million square feet of space to be used as an employment district in the Downtown area.
Currently undergoing a transformation to an innovative, live-work district, North San Jose has received more than $2.7 billion in private investment over the last few years. The president of Samsung Semiconductor stated that "North San Jose is where the future of business is happening and where technology and innovation come together," while Forbes Magazine designated San Jose as one of the coolest places to live in the U.S. There's a huge amount of growth potential in North San Jose, with room for the current 16,000 homes to more than double, area for the current 59 million square feet of work spaces to increase by 50%, and the current employee base of 81,000 to increase by more than 100%.
The business district of South San Jose offers residents and employees the benefit of a reverse commute to work, via U.S. Highways 101 and 85 and the light rail transit system. This urban village offers ample housing, world-class amenities and a highly-educated workforce. South San Jose itself has two business districts: Edenvale, which is primarily an industrial area and one of the leading job creators in San Jose; and Evergreen, which is primarily a residential and retail area with some of the most ethnically diverse neighborhoods in the City of San Jose.
West San Jose is the most up and coming area of the City and has morphed from an affordable bedroom community with moderately priced housing, to one of extremely upscale properties exceeding $1 million in price. West San Jose is closest to Cupertino and Campbell, and is home to some of the trendiest shopping in the City with boutique retail such as Louis Vuitton, Tiffany and Co., and BOSS Hugo Boss.
San Jose, CA Office Rental Rates ($/SF/year)
Data provided by Yardi Matrix, for properties larger than 50K SF.
San Jose, CA Office Sales
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
San Jose, CA Commercial Inventory Breakdown
Total: 85,679,404 SF
By square footage range:
- 50k to 100k SF: 17,290,157 SF / 20.18% of total office
- 100k to 500k SF: 41,454,968 SF / 48.38% of total office
- 500k to 1M SF: 8,705,364 SF / 10.16% of total office
- > 1M SF: 18,228,915 SF / 21.28% of total office
- Class A+: 885,000 SF / 1.03% of total office
- Class A: 22,122,063 SF / 25.82% of total office
- Class B: 32,382,648 SF / 37.8% of total office
- Class C: 1,039,628 SF / 1.21% of total office
Total: 15,818,863 SF
By square footage range:
- 100k to 500k SF: 12,941,713 SF / 81.81% of total industrial
- 500k to 1M SF: 505,150 SF / 3.19% of total industrial
- > 1M SF: 2,372,000 SF / 14.99% of total industrial
- Class A: 2,615,645 SF / 16.53% of total industrial
- Class B: 13,203,218 SF / 83.47% of total industrial
Employment in San Jose, CA
Ranked by U.S. News as the third best place to live in the U.S.A., San Jose has an unemployment rate of under 4%, an average annual salary of nearly $80,000, a median household income of over $91,000 per year, and one of the highest costs of living of any place in the country. Housing costs here are nearly four times the U.S. average. Despite this, both residents and businesses flock to San Jose, wanting to make their mark on the high-tech boom and pull in the high-tech salaries.
Some of the top private employers in San Jose include:
- Cisco Systems with over 17,000 employees;
- eBay with over 6,000 workers;
- Western Digital with nearly 3,000 people;
- IBM with over 2,300 employees;
- Kaiser Permanente with nearly 2,300 workers;
- Adobe Systems with over 2,000 people.
Other large companies based in San Jose include Samsung, Altera, Brocade, PayPal, Ericsson, Hewlett-Packard, Lockheed Martin, Qualcomm, Echelon, Extreme Networks, Micrel, Oclaro, Quantum, SunPower, TiVo, Ultratech and VeriFone.
Education in San Jose, CA
Thousands of engineering and computer science graduates enter the economy of San Jose each year, graduating from Universities such as Berkeley, the University of California, San Jose State and Stanford. San Jose State University is the largest in San Jose, with an enrollment of over 30,000 students and 130 different bachelor's and master's degree programs, and consistently ranks as one of the top public universities in the Western U.S.
The San Jose Unified School District employs over 2,300 people and is responsible for the management of the 127 elementary schools, 47 middle schools and 44 high schools within the district.
Commuting Time in San Jose, CA
With an average commute time of over 28 minutes each way, the commute time in San Jose is one of the longest in the entire State of California. Although the San Jose area has a large freeway system, it is one of the largest metro areas in the U.S. not served by a primary Interstate. As a result, over 2% of the workday commuters have a 'super commute' of over 90 minutes each way.
While San Jose continues to have some of the worst traffic congestion in the country, both public mass transit and private options are evolving:
- Many high-tech companies offer their employees private shuttle service to their campuses.;
- The Santa Clara Valley Transportation Authority operates light rail and bus service to many parts of San Jose.;
- Caltrain offers public rail service between San Jose and San Francisco.;
- Mineta San Jose International Airport and San Francisco International Airport provide air service for the San Jose area.
San Jose Demographics
- Total Population1,023,031
- Male Population(50.5 %) 516,124
- Female Population(49.5 %) 506,907
- Median Age36.40
- Average Household Income$124,356
- Median Household Income$96,662
- Median Income Under 25$44,915
- Median Income 25-44$111,129
- Median Income 45-64$110,098
- Median Income Over 65$54,452
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