San Francisco's office market: Bargain or bubble?
June 26, 2015

San Francisco has surged to become the second-most expensive office market in the U.S., and among the top dozen in the world. Thanks to the strength of tech and the expensive cost of new buildings, corporate towers have become gold mines for sellers and landlords...

BUBBLE: Please proceed with caution

San Francisco is heavily dependent on the technology industry, while many of the global cities in the world have multiple strong industries including finance and media. That could make it more vulnerable in a downturn.

“There’s a bubble,” Glenn Kelman, CEO of brokerage Redfin Corp. said on Bloomberg Television in May. “There are prices that are too high on companies. There are prices that are too high on real estate. As interest rates go up, you’re going to see a contraction.”

Available sublease space in San Francisco has grown to around 1.7 million square feet, the highest level since 2009, according to Savills Studley. Companies putting space up for sublease implies that their current growth doesn’t match their expectations when they signed leases...

San Francisco's office market: Bargain or bubble?

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