The third quarter of 2026 was a quarter of divergence. Some submarkets tightened, others loosened, and the gap between them is now wide enough to change strategy for owners, buyers and tenants. Here is what the latest broker research shows, market by market, and what I would do with it.
East Bay: strong in the south, soft up the I-880
East Bay industrial vacancy reached 9.2% in NAI NorCal’s October 2026 report, with asking rents of about $17.01 per square foot per year, down 1.6% from a year earlier. Cushman & Wakefield recorded nearly one million square feet of negative absorption in the Oakland/East Bay industrial market in Q3 alone.
But the average hides a split. In the south, Fremont industrial vacancy was 4.3% (down about 170 basis points year over year) and Newark was 4.5%. Fremont and Newark together captured 37.2% of East Bay industrial leasing with only about a fifth of the inventory. Further north, Hayward reached 11.6% and San Leandro 10.0%.
| East Bay metric (Q3 2026) | Latest |
|---|---|
| Industrial vacancy (East Bay) | 9.2% |
| Fremont / Newark industrial vacancy | 4.3% / 4.5% |
| Hayward industrial vacancy | 11.6% |
| Retail vacancy | 5.8% (rents $34.24/sf/yr, +2.3%) |
| Multifamily vacancy | 4.8% (rents +5.5% YoY) |
| Office vacancy | 16.3% |
What it means: Fremont industrial owners have leverage. Tenants and buyers have more room to negotiate in Hayward and San Leandro. Retail and multifamily are steady, and office still needs very careful underwriting.
Silicon Valley: industrial tightening
Kidder Mathews put Silicon Valley industrial vacancy at 4.6% in Q3 2026, down 70 basis points in a single quarter, with asking rents around $1.83 per square foot per month NNN. Warehouse vacancy was 6.7%, with warehouse rents up 8.2% year over year. R&D vacancy was 11.7%, and office vacancy was 15.9%, down 160 basis points from a year earlier.
Sacramento: where yield still pencils
For investors who need income, Sacramento stood out. Kidder Mathews reported an average Sacramento retail cap rate of 6.7% in Q3 2026, up from 6.4% in Q2, with vacancy at 5.9% and asking rents of $1.55 per square foot per month (up 4.25% year over year). Industrial vacancy was 6.4% and office vacancy fell to 13.6%, the lowest since 2022 (Cushman & Wakefield).
Compare that with California net-lease listings, which Net Lease World showed asking a median of roughly 5.25% in October 2026. That gap is why many of our Bay Area investors are looking north.
What I would do now
- Owners of Fremont/Newark industrial: this is a strong time to test the market or renegotiate leases.
- Owners in Hayward or San Leandro: price realistically, and consider whether leasing up first would raise your sale price.
- Investors targeting 6.5%+: look at Sacramento and the Central Valley, or at value-add and lease-up deals in the East Bay rather than stabilized Bay Area NNN.
- Business owners: softer East Bay pockets plus SBA financing can make owning your building more attractive than renting.
The full numbers are in our Q3 2026 market report, and city-level detail is on our Fremont, Hayward, Tracy and Sacramento pages.
Sources: NAI NorCal East Bay report (October 2026); Cushman & Wakefield Q3 2026 MarketBeats (East Bay/Oakland industrial, Sacramento industrial and office); Kidder Mathews Q3 2026 reports (Silicon Valley industrial, R&D and office; Sacramento retail); Net Lease World asking cap rates (October 2026).
