Does Flood Of Supply Have The Potential To Dilute San Francisco Office’s Strong Prices?
In the past three years, the San Francisco office market has had unprecedented leasing activity.
Rents have reached record highs, absorption rates have largely been positive despite recent hiccups and vacancies well below 10% indicate a very robust market.
That’s why Colton Commercial president Brad Colton (left) and partner/co-founder Jay D. Shaffer (right) are eyeing recent market developments with optimism and eagerness.
“There are currently 27 buildings that have direct space over 100k contiguous square feet available, altogether comprising over 6.8M SF of available office space,” Jay tells us.
In addition, over 2M SF of large sublease office space is available, dispersed among 15 buildings.
But Brad's wary of this amount of supply’s potential to depress prices as it exceeds demand. There are only a handful of tenants in the market in the 100k SF range.
“2017 may be a game-changer, possibly exacerbating recent absorption trends, as almost 3M SF of additional new construction office space is soon to hit the market,” he says.
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