Big City Blocks Suddenly Up For Grabs
Just this week, a total of 330k SF of direct space hit the market, according to one downtown broker who's familiar with the deals.
The big chunks of space are within blocks of each other in the Financial District. Bank of America, which had a master lease on 315 Montgomery for years, just dropped 130k SF. And a short walk south at 555 Market (snapped this morning), 200k SF is being vacated by communications giant Omnicom. Many smaller spaces have also begun to pop up and are coming online, and VC clients are telling our source the market correction is coming in 18 to 24 months.
Rental rates also tell a story downtown, where Class-A high-rise (non-view) spaces have been hovering in the mid-$50s for a full year now, with just $1 to $2 of growth. Class-B downtown rates are also in the $50s across the board, with little growth. Spaces in the $60s into the $70s exist, but they are "super cool or have a good view," says our source. (The pinnacle, breaching $100/SF: Supercell's penthouse space atop 555 Cal where Carly Rae Jepsen sang some tunes last winter.)
