SAN FRANCISCO—Preliminary first quarter summary statistics for the San Francisco office market from Cushman & Wakefield show that the wave of new construction has finally hit the shores of the CBD. According to Andrea Arata, Northern California research manager at Cushman & Wakefield, “Despite the slight uptick in vacancy within the CBD, strong employment, increased leasing velocity, and expansions within the technology sector indicate that we are in a solid position to absorb the new space that will continue to come online this year and next.”
According to Cushman & Wakefield's preliminary Q1 stats, leasing activity totaled 1.9 million square feet, the third-highest level for the first quarter in 10 years.
In addition, technology companies continued to dominate leasing activity during the quarter with significant new leases by Twitter, Dropbox, Linkedin, Trulia and Practice Fusion, as well as Google's 372,000-square-foot renewal at Hills Plaza.
But it isn't just technology companies that are making a mark. Bare Escentuals, for example, took 94,000 square feet lease at 71 Stevenson, KPMG renewed of 81,000 square feet at 55 Second St. and Winston & Strawn signed a 52,000-sqaure-foot renewal at 101 California.
On the development side, both new buildings and major renovations were completed in the first quarter including Foundry Square III (505 Howard) and 680 Folsom. “As a result of the new space coming online in the CBD, the vacancy rate inched up to 9.1% from 8.9% last quarter,” says the firm.
Direct Citywide asking rents continued their upward trajectory and rose 3.4% during the quarter to $58.63 per square foot as more companies take down these large blocks of new space. “In the CBD, rent growth was even stronger during these first three months of the year with a 3.8% increase to $60.19 per square foot, the highest average rent in nearly 14 years.”
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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.
