| We chatted with CBRE research and analysis director Colin Yasukochi about the San Francisco office market?s recent declines in net absorption. He tells us there's nothing to fret about; while the rate of growth has slowed down these past two quarters, ?it's still strong?—especially when measured against other markets. San Francisco has recorded 1.1M SF of net absorption YTD, compared to 2.1M SF last year and a historic average of 700k to 800k SF. Rents have also grown substantially this year—up 28% from a year ago. He expects activity to pick up in Q4, resulting in a very strong overall 2012, though it won't exceed 2011. (A bit embarrassing considering this was a leap year. How did we squander all those 24 hours?) |
| In 2012, tech represents 50% of total leasing activity and 75% of total demand. The last time it dominated the market so completely was in the dot-com boom, but ?everything else was growing as well.?New construction is also returning to the market, which could result in a modest rise in vacancy. When the new inventory is delivered, he expects some musical chairs as firms already residing in The City take larger spaces, leaving their existing spaces behind. However, ?They're taking a bigger chair, so it's true demand from that perspective.? When he can, Colin travels to experience the culture, food, and architecture of cities around the world. |
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