Hacienda Navigates Soft Market with Strong Long-Term Commitments

Pleasanton, Calif. – Hacienda, Northern California’s largest business development, saw a decline in occupancy at the start of 2025, with its vacancy rate increasing by the end of the second quarter. This shift was largely due to significant closures, led primarily by Party City and Kohl’s. Despite these challenges, Hacienda’s long-term appeal remains strong, as evidenced by the major lease agreements secured over the past year with key organizations. With a diverse range of tenants, a strong emphasis on essential sectors such as healthcare and advanced services, and several upcoming lease transactions, Hacienda anticipates an improved performance through the rest of 2025.

Occupancy & Leasing

Hacienda experienced a further decline in occupancy at the start of 2025. By the end of the second quarter, the vacancy rate had climbed to 18.86%, compared to 15.22% at the end of 2024.

Net absorption remained negative in the second quarter, totaling nearly 300,000 square feet, compared to a positive 43,921 square feet in 2024. The well-publicized closures of Party City and Kohl’s in Pleasanton last quarter contributed significantly to this decline, accounting for more than 55% of the negative absorption. However, with additional transactions anticipated along with opportunities for a rise in local market activity, an improvement is projected for the remainder of 2025.

In July, monthly occupancy declined to 6,602,979 square feet, compared to 6,628,368 square feet at the end of June. Leasing activity for the month was largely driven by smaller spaces, with deals for units under 10,000 square feet accounting for 94.74% of all transactions and 71.38% of the total square footage leased. In contrast, mid-sized spaces between 10,000 and 50,000 square feet comprised 5.26% of transactions and 28.62% of the leased volume. These figures highlight the ongoing trend of tenants favoring smaller, more flexible spaces amid shifting operational demands and continued economic uncertainty.

Despite a slow start to 2025, Hacienda continues to demonstrate its long-term appeal, as reflected in several major leases secured over the past year. The development was home to some of the largest lease transactions along the I-680 corridor last year. Sutter Bay Medical Foundation leased 64,222 square feet at 4480 Willow Road, while Acco Engineered Systems Inc. took 67,757 square feet at 5890 Owens Drive. Additionally, Sutter Health’s Palo Alto Medical Foundation signed a 23,000-square-foot lease at 5075 Hopyard Road as part of its broader plan to open more than 25 new ambulatory care centers across its network. Renovations for these facilities are set to begin this year, with openings planned for 2026 and 2027.

The business services sector continues to lead in occupancy, utilizing 1,823,342 square feet of space. Biomedical firms follow with 1,163,099 square feet, while the manufacturing and healthcare sectors occupy 471,332 and 392,522 square feet, respectively. Complementing these core industries are tenants from a variety of sectors—including retail, hospitality, software development, education, and consumer goods—highlighting the area’s diverse tenant mix and the broad range of employment opportunities available throughout the Bay Area.

“While we are certainly confronted with the challenges seen in the larger Bay Area real estate market this year, as witnessed by some of our higher-profile closures, Hacienda’s fundamentals remain strong,” said James Paxson, Hacienda’s General Manager. “The flow of new leases—especially from essential sectors like healthcare and advanced services—shows that businesses continue to see long-term value in locating at Hacienda. We are encouraged by the pipeline of transactions ahead and remain confident that Hacienda’s diverse tenant base and prime location will support continued recovery and growth through the rest of 2025 and beyond.”

Population and Employment

At the end of the first quarter of 2025, Hacienda accommodates 14,267 employees across 669 companies. This number is anticipated to grow as new developments unfold and occupancy rates approach pre-pandemic levels. 

Additionally, Hacienda’s residential communities currently have approximately 5,844 residents, a figure that is expected to increase to 6,400 with ongoing housing developments. 

As of the 2020 U.S. Census, the region’s population was 400,213. 60% of Tri-Valley residents hold a bachelor’s degree or higher, surpassing the educational attainment levels of both California and the broader Bay Area. This concentration of skilled professionals contributes to a robust labor force, making the Tri-Valley an attractive location for employers seeking top talent. In terms of demographics, 45.4% of residents are aged between 25 and 44, and over 58% report annual incomes exceeding $150,000. The region’s high quality of life, characterized by natural beauty, tight-knit communities, and top-notch schools with a graduation rate of 97%, further enhances its appeal to innovators and business leaders.

City of Pleasanton

Pleasanton’s demographics reveal a highly educated workforce, with over 85% of residents having attended college and nearly 70% holding a college or professional degree. The city also enjoys a high household income, with over 75% of households earning more than $75,000 annually. Pleasanton is a young city, with nearly a third of the population under 19 and over a quarter aged between 20 and 54, indicating a substantial portion of residents in their prime career years. The city boasts a rich history and character showcased in its picturesque downtown, reflecting its commitment to a high quality of life. Hacienda exemplifies this with its excellent educational facilities, abundant recreational activities, and a favorable climate for enjoying sports facilities, parks, and golf courses.

Hacienda Overview

This overview offers the latest information on Hacienda’s occupancy, tenant updates, sales, and regional data of interest. For additional details, please consult the Project Overview section on our website.

Park Activity

• Occupancy and Major Tenant Transactions (Summary of occupancy information and major tenant activity)
• Development (Summary of development approvals and project construction information)
• Sales (Summary of project sales)

General Park Information

• Population (Summary of employee and residential population)
• Land Use (Summary of activity by land use)
• Demographics | Area and Community (Summary of demographic characteristics from 2010 US Census and 2019 American Community Surveys)
• Valuation (Summary of valuation)

Projects and Tenants

• Property Profiles (Interactive summary of project-specific information)
• Business Directory (Summary of businesses located in Hacienda)

About Hacienda

People come to the San Francisco Bay Area for many reasons: a spectacular natural setting, a sophisticated lifestyle, and unique professional opportunities. Quality of life means having the best of everything within easy reach, whether it’s world-class restaurants, theater and museums, the best learning institutions in the country, or some of the finest services available.

Quality of life applies to business, too: having easy access to needed resources, being among other industry leaders, and knowing that you are part of a region that leads the world in innovation. When working and living environments both enhance quality of life, the result is an unbeatable combination that leads to success; and that is what you will find at Hacienda.

Centered in a dynamic region and propelled by the Standard Metropolitan Statistical Areas of San Jose, Oakland, and San Francisco, the Bay Area is a robust economic region. Hacienda, located near the center of the Bay Area in Pleasanton, spans 875 acres and is home to over 630 companies employing approximately 15,700 people. In addition to being a hub for business, Hacienda also features homes for about 6,000 residents, offering a full spectrum of residential choices.

Contact Information

For more information about Hacienda and our latest developments, please contact:

Hacienda Owners Association
4305 Hacienda Drive
Suite 330
Pleasanton, Calif. 94588-2738

T: (925) 734-6500
E: info@hacienda.org
W: hacienda.org | LinkedIn | Hacienda Online

Photo courtesy of the Hacienda Owners Association.