SAN FRANCISCO-GlobeSt.com has learned that Esurance has expanded in San Francisco within their building at 650 Davis St. also known as one of the three buildings that make up Golden Gateway Commons. The firm will take more than 90,000 square feet.
The company is renewing their current lease and taking on another 41,000 square feet, we are told from an industry source.
Arden Realty purchased Golden Gateway Commons in August 2008 for $98 million or $351 per square foot. We will follow up on this story as more information becomes available.
According to a recent San Francisco office report from CBRE Global Research and Consulting, occupancy gains in the third quarter outpaced the entire first half of the year and were driven by construction deliveries filled with mostly high-tech tenants. The recently completed projects 140 New Montgomery and 888 Brannan combined contributed 57% of the 737,074 square feet of net absorption for the quarter, bringing the year-to-date total to 1 million square feet. These same projects also added 151,000 square feet of unleased vacant space to the market, which kept the vacancy decline to a modest 30 basis points over last quarter's 8.5%, given the strong net absorption.
Looking down the pipeline, the firm says that 1.5 million square feet of new construction is scheduled to deliver in the first half of 2014. These properties combined are currently 60% pre-leased and will add another large amount of net absorption and possibly vacancy upon delivery. “After this set of projects however, there will be a lull in new construction deliveries with available space until at least the middle of 2015. Should demand maintain its current strength during this time, vacancy is expected to drop significantly, potentially fueling accelerated rent increases market wide.”
For rent growth, the firm says in Q3, it continued its upward trend, growing at a 3.5% rate over last quarter. Ahead, demand strength will continue to be derived from the high-tech sector, which has accounted for more than 90% of positive absorption year-to-date. Much of this growth has been organic as tech companies city wide add jobs and expand their space requirements, often doubling their footprints in a single move. There is also evidence that growth is increasingly being fueled by outside tenants moving into the market, says the firm.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
