Will fast-growing technology firms save San Francisco’s commercial leasing market?
San Francisco tenants gave back another 570,000 square feet of office space in the second quarter, with Wells Fargo relinquishing 350,000 square feet of space at 155 Fifth St. and BlackRock vacating 113,000 square feet at 45 Fremont St., according to a Grubb & Ellis report.
... Grubb & Ellis calculates a 13 percent increase in tenant demand over the last six months, with tech firms representing more than 30 percent of the demand. The tenant representative firm Studley is tracking 1.5 million square feet of demand from tech companies. Space near the Caltrain station is snapped up quickly.
“Anything near Fourth and Townsend is the holy grail right now,” said Jeffrey Moeller of Grubb & Ellis.
But the anticipation of a San Francisco office market recovery by bullish landlords and optimistic economists in the second quarter of 2010 “appears to be ahead of reality,” according to Studley. Studley sees the fundamentals remaining weak, with total availability hovering at 19.7 percent, just below the all-time high of 20.2 percent reached one year ago.
“The titans of San Francisco’s tenant base — legal, banking and insurance companies — are simply not growing in 2010,” said Steve Barker, Studley executive vice president. ...
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