Despite Sector Decline, Local Developers Have Hope

Part 2 of 2-part series

[IMGCAP(1)]SAN FRANCISCO-Although it is difficult to predict just how long and severe the current downturn will be, one thing we do know is that any economic times such as these become a test of sector resilience. And as discussed in part one of the two-part Bay Area market overview on GlobeSt.com, the technology market is faring well, and is expected to lead the recovery out of the current recession. The same cannot be said for other sectors in the Bay Area.

Office SlowdownSublease is a word we are hearing more and more in the Bay area’s office sector, as the amount of available space is becoming a major factor in the local leasing market. Since this time last year, the ratio of available direct space to available sublease space has increased from 15% to nearly 30%, a CBRE report states. “As this ratio continues to increase, overall asking rates will fall as well in order to compete.”