Commercial vacancy rates are a key indicator used by economists to identify trends and understand current and future economic conditions. In most cases, lower vacancy rates suggest higher demand which will likely result in rising rents and sales prices as well as an increase in new construction in the future. Higher vacancy rates suggest excess capacity and could result in a slowdown in new construction in conjunction with a slowdown in the rate of increase of rents and sales prices. Reviewing vacancy rates in the context of neighboring cities is helpful to gauge Redwood City’s competitiveness in the regional market. Below are three reports that may be of interest.