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Limited Office Supply in San Francisco, but Plenty in the Burbs

09/26/2014
jeffrey weil, jeff weil colliers, colliers san francisco, office leasing

San Francisco office growth is not sustainable and there will soon come a time when new office construction will slow down, primarily due to Prop M cap limitations according to theSan Francisco Business Times. Every year, San Francisco has 950,000 square feet of office allotment, and during The Great Recession, unused allotments rolled over to allow the tremendous new building going on today. As of May 2014, there was slightly more than 2 million feet available for allocations with more than 8 million feet in pre-approval. With potentially limited office space supply, rents will go up further, and non-tech companies that aren't dependent on the San Francisco tech labor pool may either move some or all their operations eastward to the suburbs or lower-expense areas, such as Texas, or offshore the jobs, or a combination of these. And, it is inevitable that at some point we will have another economic downturn to start the cycle all over again. 

Out in the suburbs, we are seeing a trend with certain industries, such as title and insurance companies, downsizing, often taking half of the previous space, as paper goes online, into the clouds or gets processed overseas. Landlords with national tenancies of this type might not get the occupancy stability they have enjoyed during the past 20 years...

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By: Jeffrey Weil

Executive Vice President | Colliers International - Walnut Creek

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.

jeff weil, jeffrey weil, jeff weil colliers, jeffrey weil colliers, jeff weil colliers international, jeffrey weil colliers internation, colliers san francisco, colliers bay area

Email Jeffrey: jeffrey.weil@colliers.com

Follow Jeffrey on Twitter: @jeffreyweil

Follow Colliers International on Twitter: @colliersintl

More From Jeff Weil:

How Come Tech Companies Have All of The Fun?

Open Office Space: What Are The Pluses and Minuses? 

Foosball and Ping Pong Foster Creativity and Collaboration 

Money In and Money Out: Energy and Operating Expenses 

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