In most office markets not fortunate enough to have Google, Facebook, Twitter, LinkedIn or other rapidly growing and profitable tech companies, the tenant base of attorney firms, CPA's, financial planners and corporate branches are either getting more workforce in the same or less square footage or are growing at very conservative levels. These office markets are not robust business climates for office leasing specialists, but having a healthy market sure beats the alternative ...
San Francisco office leasing continues to be more than robust. A recent headline in the San Francisco Business Times read: "Pre-leasing frenzy soaks up spec offices with almost 75 percent of all the office space under construction for 2014 delivery already leased and about half of the 2015 office construction pre-leased as well." One report quoted Carl Shannon, managing director of developer Tishman Speyer as follows, "We are blessed in San Francisco to have an economy which has overcome the shrinking that is going on in corporate America." Shannon sees full-service gross rents reaching into the low $80 range per square foot annually in San Francisco. But the rising rents won't scare off the big tech tenants, either. "The tenants that matter are not incented by saving rent," Shannon said. "It's all about, `How am I getting employees?' Rents are a very small part of their expense."
Meanwhile, in the East Bay suburbs, there is plenty of $20 to $35 square foot per year, full-service, Class A office space with all the amenities ... free garage parking, free common conference centers, free on-site exercise facilities, BART and tens of thousands of hard-working, suburban employees to hire. The Bay Area has enough space to go around, depending on what location fits your business needs.
By: Jeffrey Weil
Jeffrey Weil is an executive vice president for Colliers International Walnut Creek. Mr. Weil has specialized in the sale and leasing of commercial properties for 38 years and has achieved CCIM, SIOR and NACORE’s Master in Commercial Real Estate Services with Honors (MCR.h) designations.
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