Last November, Mercedes-Benz opened a 71,715-square-foot R&D center in Sunnyvale, Calif., one of many such facilities in the region. Daimler Corporate Communications/Associated Press

Demand for industrial and office space in parts of Northern California has been on the rise, due mainly to the rapid growth of the technology sector. Now another business group is jockeying for space: the automotive industry.

The production of Tesla Motors Inc. 's electric battery-powered luxury cars has driven much of the automotive-industry growth in the East Bay, not just from Tesla but also from suppliers that have followed the company to the region. In May, Futuris Automotive Inc., a Tesla supplier, made a deal with Prologis for 160,000 square feet of mostly industrial space in Newark, an East Bay city adjacent to Fremont. And in June, another supplier, Toyota Tsusho America Inc., or TAI, signed a five-year-lease for 64,000 square feet in Fremont near Tesla's factory.

But while the growth of auto manufacturing has been mostly confined to Tesla and its supply chain, the growth of auto research and design investment in Silicon Valley has been spread widely throughout the industry. BMW AG , Nissan-Renault, Ford Motor Co. and Toyota have opened large technology-centered research-and-development offices there since 2012, adding to a cluster of R&D facilities occupied by General Motors Co. , Honda Motor Co. and Volkswagen AG, among others.

"The future of the car is in Silicon Valley," said Tracey Grose, vice president of the Bay Area Council Economic Institute. "We're getting this entirely new ecosystem around automotive parts."

For real-estate investors, the trend means opportunity. "I think the continued growth in the automotive industry will result in positive net absorption [of space] in Silicon Valley and the East Bay," said Greg Matter, a senior vice president at broker JLL. "We're starting to see speculative developments on the way."

Citing factors including the growth of automotive-focused manufacturing and demands from e-commerce companies for warehouse space, Mr. Matter says he is seeing investors building industrial projects in parts of the region like the East Bay where construction had ground to a halt during the economic downturn.

The vacancy rate at warehouses, distribution centers and factories greater than 50,000 square feet was 9.8% in the second quarter, down from 13.5% at its peak in 2010, according to broker JLL. Asking rents now surpass their prerecession highs in the East Bay. Rents have risen more slowly but are up 9% in the 12 months through March in the Central Valley, where Tesla recently acquired 431,000 square feet of manufacturing space and International Auto Logistics acquired a 500,000-square-foot former Heinz factory, that area's largest new lease.

Auto companies' investments in R&D in the Valley has waxed and waned with the tech industry's cycles of boom and bust since the mid-1990s, according to Sven Beiker, executive director of Stanford University's Center for Automotive Research.

Tech companies' investment in cars has grown considerably. With CarPlay, Apple has integrated the iPhone and its voice-recognition system, Siri, into the dashboard computers of five companies' 2014 models and plans to include them in future models of many other car makers. Meanwhile, Google wants to replace drivers with robots.

Among those cars with the Apple system already in place is Mercedes-Benz. Last November, the Daimler AG subsidiary opened a 71,715-square-foot R&D center in Sunnyvale within blocks of Apple offices. And the luxury auto maker also is working with Google to integrate Glass, its wearable head technology, with its in-car navigation systems.

But because of high labor costs and the persistence of gas and diesel-powered engines, Mr. Beiker doesn't expect Northern California to ever replace Detroit or Yokohama as either centers for manufacturing or even traditional R&D.

"I don't see crash-testing coming here," Mr. Beiker says. "I don't see chassis-testing here. But everything else is up for grabs. If that's entertainment systems, online systems or self-driving systems—[for] everything that really drives innovation in cars today, Silicon Valley might be the powerhouse."

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