News
More Office Tenants Renewing
February 15, 2012
| San Francisco’s office tenants are almost as loyal toward their landlords as residents are toward crooners named Tony Bennett. According to Kingsley Associates’ latest quarterly office industry trends report, a greater percentage of San Francisco tenants are planning to renew their leases. |
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| With 62.7% of the San Francisco respondents in the firm’s Q4 2011 report exhibiting a desire to renew, San Francisco’s degree of office tenant loyalty outpaced the US as a whole and was the third highest after Miami and Atlanta. President Steve Kingsley tells us this increase may actually be due to a tightening market. In addition, he notes San Francisco came out on top when it comes to the importance tenants place on green buildings. More good news for existing landlords: Steve says research shows tenants’ renewal intentions are “highly predictive” of their actual renewal. |
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| Steve (in his office at 44 Montgomery) tells us the signals point to an improving office leasing market. Nationally, nearly 62% of the office tenants who were surveyed in 2011 indicated an intent to continue in their space, an increase from the previous year (and up 3.2 percentage points since the low of 58.6% at the end of ’09.) Over the past six quarters, the real estate business intelligence firm has seen a steady increase in tenants requiring more space. According to Steve, the increase suggests the respondents’ confidence in their specific businesses and also that landlords largely are meeting their tenants' needs. |
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| Location was No. 1 factor for tenants planning to stay put. On the flip side, for the 6.1% of tenants who were unlikely to renew, price and space requirements were the top factors in their departure plans. (Much to our chagrin, no one seems concerned about the presence of sharks.) But landlords can’t rest on their laurels—tenant satisfaction took a slight dip in Q4 but is still over 85%, which Steve calls a very high benchmark historically. When he’s not busy surveying clients’ office tenants (who collectively occupy nearly 1B SF), he likes to spend time with his family up in Healdsburg and volunteers with non-profit orgs that help kids at risk. |
