SiliconBeat

Tech blog impresario Michael Arrington is very happy with the terms of his new office lease in downtown Palo Alto. A softening in Silicon Valley’s commercial real estate finally enabled the digital media enterpreneur to move his growing TechCrunch empire out of his home in Atheron, where he was being threatened with legal action.

How soft has the market gotten? Arrington describes “the wholesale destruction of the office rental market in Silicon Valley.”

But Phil Mahoney, with the commercial real estate firm Cornish & Carey, says the market may resemble a marshmellow but it is far from melting. Mahoney told the Mercury News there is a 15 percent vacancy rate in Class A commercial real estate versus 30 percent in the post-dot-com economic apocalypse. And, unlike, previous cycles of boom and bust, the industry managed not to overbuild. He says the upshot is that Class A space is still renting at roughly what it did in 2006.