If you are a downtown San Francisco office tenant waiting for cheap sublease to grab, you are going to have to wait a bit longer...
In a recent report the tenant rep shop Studley pointed out that tech companies are taking more space than they need, while efficiencies and the trendy collaborative workplace design is allowing the rest of the market to shrink square footage. Tech tenants are “making pre-emptive strikes and warehousing block of space in anticipation of future growth.” In contrast, legal, financial and other traditional space users are “taking a more analytic and cautious approach, having largely too much space already...”
Eventually, as anyone who has observed the boom-and-bust cycles of San Francisco’s past can understand, the market will crash and sublease space will become abundant. Although in this sizzling market it may take another few years. That is not going to be much solace if you are looking for a new office in 2014.
“It is critical that tenants of all sectors and sizes understand the pace of the market and rationally assess alternatives in both the short- and long-term,” said Steve Barker, Studley EVP and branch manager of the firm's San Francisco office. “For example, large tenants with leases expiring between 2015 and 2017 have the time to assess whether or not the market’s growth will continue unabated. One potential opportunity for these users is the next wave of top-tier product which is set to deliver during the same timeframe. The first tenants to make sizeable commitments in the new projects will likely capture the greatest space efficiencies and generous concessions.”No vacancy: S.F. sublease space falls to 13-year low
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