San Francisco commercial real estate getting stronger
September 30, 2011
By: J.K. Dineen

San Francisco's commercial office market continued to strengthen in the third quarter as expanding companies, seemingly oblivious to the gloomy global economy, took 375,000 square feet more than they gave up. ...

... On the tenant representation side, brokers are seeing some early signs of weakness. Matt Hart, a managing director at the tenant rep shop Studley, said "all signs have been positive in 2011 - there is no question about that." But he said there have been some recent indications that tech companies may be gobbling up space based on unrealistic or overly optimistic growth assumptions, as they did in the boom times of 1999-2000 and 2006-2007. He recently toured a large 16,000-square-foot SoMa space that had a beautiful cocktail bar - but only about four employees. Hart has tenant clients looking at marketing a combined 100,000 square feet for sublease.

"I'm working on three disposition analyses for San Francisco companies, all of which took too much space or no longer need space because of (merger and acquisition) activity," said Hart. "We are tracking a lot of space that is not on the market but we expect to see on the market." ...

Link to article