The San Mateo County industrial market remained relatively tight through the first half of 2026 in Cushman & Wakefield’s reporting. Countywide vacancy held at 4.7% in Q1 and Q2, while North County vacancy moved from 5.5% to 5.2%.
For a small business, a tight headline vacancy rate does not answer the practical question. Most industrial inventory is still designed, priced, and leased for larger occupiers. The useful decision is whether a specific building offers the right footprint, approved use, loading, operating setup, and commitment.
Inventory, Vacancy, and Absorption
Cushman & Wakefield tracked approximately 39.7 million Sq Ft of San Mateo County industrial inventory in Q1 2026.
| Market measure | Q1 2026 | Q2 2026 |
|---|---|---|
| San Mateo County vacancy | 4.7% | 4.7% |
| North County vacancy | 5.5% | 5.2% |
| County net absorption | +35,967 Sq Ft | +10,961 Sq Ft |
| South San Francisco net absorption | -24,579 Sq Ft | +133,209 Sq Ft |
South San Francisco’s absorption changed direction between quarters. The Q2 gain followed a negative Q1, so the result should not be presented as a steady trend.
Leasing Demand and Smaller Requirements
CBRE reported that almost 80% of Peninsula industrial leases completed in Q2 2025 were 10,000 Sq Ft or less. That figure does not show micro-unit availability, but it confirms that smaller requirements are an important part of demand.
South San Francisco also has a large life-science and biotechnology base. The city reports 217 active biotech companies. That cluster supports suppliers, service businesses, contractors, and logistics activity alongside traditional industrial users.
Third-Party Comparable-Market Asking Rents
Cushman & Wakefield reported these Q2 2026 monthly NNN asking figures:
| Product type | Monthly asking rate |
|---|---|
| San Mateo County industrial average | $1.74/Sq Ft NNN |
| Warehouse | $1.64/Sq Ft NNN |
| Manufacturing and light industrial | $2.09/Sq Ft NNN |
These are third-party asking figures for broader industrial inventory. They are not WareSpace rates, achieved rents, or final occupancy costs. A tenant may still pay NNN, CAM, utilities, insurance, equipment, improvements, and setup beyond base rent.
Use the South San Francisco warehouse cost guide to compare the full commitment.
SFO, US 101, and Goods Movement
SFO reported 541,998 metric tons of loaded and unloaded cargo in FY2025, including 368,582 metric tons of international cargo. Its FY2024 economic study valued goods moving through the airport at about $42.8 billion.
Caltrans identifies US 101 as a primary Bay Area freight route that connects airport facilities and other goods-movement corridors. That network supports logistics, freight forwarding, distribution, and time-sensitive inventory, but it does not guarantee a specific carrier schedule or building travel time.
Read the warehouse near SFO guide for an operating checklist.
What the Market Means for Small Businesses
A tight market increases the value of knowing the non-negotiables before touring or joining a waitlist. Small operators should:
- Choose the smallest functional footprint, not the smallest room
- Compare the full 12-month commitment
- Verify loading, access, HVAC, power, internet, and approved use
- Separate market asking rent from the final occupancy cost
- Avoid paying for years of hypothetical growth
- Confirm how the footprint can change when the workflow changes
The San Francisco size guide maps workflow to practical unit bands. Contractors can use the contractor warehouse guide, while online sellers can use the Bay Area e-commerce guide. The South San Francisco industrial areas guide compares operating geography.
WareSpace South San Francisco is coming soon to 161 Starlite St. The opening window is Summer 2027. Building-specific inventory and pricing are not published. Join the Founders List for verified updates.
Risks and Methodology
- Brokerage reports define inventory and submarkets within their own systems.
- Vacancy does not show the availability of private spaces under 2,000 Sq Ft.
- Asking rent is not executed rent and may exclude NNN, CAM, utilities, insurance, equipment, and setup.
- Quarterly absorption can move sharply when individual leases begin or end.
- South San Francisco WareSpace unit inventory, opening date, final amenities, and building-specific pricing remain unconfirmed.
- Figures should be refreshed when Q3 2026 reports become available.
Sources
- Cushman & Wakefield San Mateo County Industrial MarketBeat, Q1 2026
- Cushman & Wakefield San Mateo County Industrial MarketBeat, Q2 2026
- CBRE South San Francisco industrial lease release
- SFO FY2025 Fact Sheet
- SFO FY2024 Economic Impact Study
- Caltrans US 101 South Comprehensive Multimodal Corridor Plan
- City of South San Francisco
