Fueled by a growing population, the Bay Area’s commercial real estate market continues to thrive. Tech companies continue to dominate the office market, while the city boasts one of the lowest retail vacancy rates among major U.S. metro areas, according to a Cushman & Wakefield report. On the industrial side, continued e-commerce demand and insufficient new supply have put pressure on an already strained market.
Think you are up-to-date on the latest news impacting San Francisco CRE? Take this quiz to find out.
1
To accommodate a growing population, how many total jobs does San Francisco need to add by 2040?
YOU'RE CORRECT!
The Bay Area will need 1.1 million additional jobs to accommodate an estimated 2.1 million more people expected to move to the city by 2040.
A growing workforce has led to an increased need for not only office space, but the retail assets necessary to retain young professionals flocking to the city. Industrial properties, particularly those leased by e-commerce companies, have also flourished as the population grows, putting further pressure on last-mile delivery.
YOU'RE WRONG!
The Bay Area will need 1.1 million additional jobs to accommodate an estimated 2.1 million more people expected to move to the city by 2040.
A growing workforce has led to an increased need for not only office space, but the retail assets necessary to retain young professionals flocking to the city. Industrial properties, particularly those leased by e-commerce companies, have also flourished as the population grows, putting further pressure on last-mile delivery.
2
Which company had the largest office lease of Q1 2018?
YOU'RE CORRECT!
WeWork added 251K SF in March, the largest lease of Q1 2018. Co-working spaces, alongside major tech companies like Facebook and Dropbox, have been among the most notable occupiers of office space in the Bay Area. Dropbox, for example, pre-leased 751K SF in Q4, the largest office lease in San Francisco’s history.
“Demand is high and it continues to come from tech tenants,” JPMorgan Chase Regional Sales Manager David Diggs said. “We saw tech companies drive the majority of demand in 2017, and it was a record year for office leases.”
YOU'RE WRONG!
WeWork added 251K SF in March, the largest lease of Q1 2018. Co-working spaces, alongside major tech companies like Facebook and Dropbox, have been among the most notable occupiers of office space in the Bay Area. Dropbox, for example, pre-leased 751K SF in Q4, the largest office lease in San Francisco’s history.
“Demand is high and it continues to come from tech tenants,” JPMorgan Chase Regional Sales Manager David Diggs said. “We saw tech companies drive the majority of demand in 2017, and it was a record year for office leases.”
3
What percentage of office space currently under construction is pre-leased?
YOU'RE CORRECT!
The majority of the new supply set to deliver in 2018, including the Salesforce Tower, is pre-leased. JPMorgan Chase’s clients have looked to both acquire and refinance office properties, attracted to the low vacancy, which hovered around 8% in Q4 according to JLL, and high demand.
YOU'RE WRONG!
The majority of the new supply set to deliver in 2018, including the Salesforce Tower, is pre-leased. JPMorgan Chase’s clients have looked to both acquire and refinance office properties, attracted to the low vacancy, which hovered around 8% in Q4 according to JLL, and high demand.
4
How much San Francisco retail space traded hands in Q4 2017?
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On the investment side, 150K SF of retail in San Francisco traded hands during Q4, bringing total annual transaction volume to over 920K SF in 2017, according to a Cushman & Wakefield report. Total investment sales in Q4 were $126.7M. The notable transactions highlight a favorable cap rate, which at 4.3% remains below the average nationwide average cap rate of 6.5%.
YOU'RE WRONG!
On the investment side, 150K SF of retail in San Francisco traded hands during Q4, bringing total annual transaction volume to over 920K SF in 2017, according to a Cushman & Wakefield report. Total investment sales in Q4 were $126.7M. The notable transactions highlight a favorable cap rate, which at 4.3% remains below the average nationwide average cap rate of 6.5%.
5
Which specialty coffee shop recently opened its first West Coast location in the San Francisco Financial District?
YOU'RE CORRECT!
A growing population of young professionals has fueled a demand for experiential retail. Restaurant concepts, movie theaters and other concepts themed around social activity have performed well in the Bay Area. The area boasts one of the lowest retail vacancy rates among all major U.S. cities. San Francisco also remains a fine-dining capital, with seven three-star Michelin restaurants, compared to six in New York and three in Chicago.
Retail success has prompted businesses to move to San Francisco. Melbourne-inspired coffee shop chain Bluestone Lane debuted its West Coast location in the San Francisco Financial District in Q4 2017, according to report from Cushman & Wakefield.
“It goes back to the larger story that the economy in the Bay Area continues to do well,” Diggs said. “Retail is benefiting from that, especially food and beverage. Experiential retail is also a strong category, especially given its ability to withstand e-commerce.”
YOU'RE WRONG!
A growing population of young professionals has fueled a demand for experiential retail. Restaurant concepts, movie theaters and other concepts themed around social activity have performed well in the Bay Area. The area boasts one of the lowest retail vacancy rates among all major U.S. cities. San Francisco also remains a fine-dining capital, with seven three-star Michelin restaurants, compared to six in New York and three in Chicago.
Retail success has prompted businesses to move to San Francisco. Melbourne-inspired coffee shop chain Bluestone Lane debuted its West Coast location in the San Francisco Financial District in Q4 2017, according to report from Cushman & Wakefield.
“It goes back to the larger story that the economy in the Bay Area continues to do well,” Diggs said. “Retail is benefiting from that, especially food and beverage. Experiential retail is also a strong category, especially given its ability to withstand e-commerce.”
6
Which of the following was a notable Q4 2017 industrial lease in the Bay Area?
YOU'RE CORRECT!
A response to the growing success of food and beverage in the Bay Area, Forest Restaurant Supply leased 97K SF of industrial property in Burlingame in Q4 2017. The equipment and furniture supply company was part of the multi-industry competition for the shrinking availability of industrial space over 30K SF, according to a JLL report.
YOU'RE WRONG!
A response to the growing success of food and beverage in the Bay Area, Forest Restaurant Supply leased 97K SF of industrial property in Burlingame in Q4 2017. The equipment and furniture supply company was part of the multi-industry competition for the shrinking availability of industrial space over 30K SF, according to a JLL report.
7
What is the industrial vacancy rate in the Greater San Francisco Bay Area?
YOU'RE CORRECT!
With no new industrial development in the pipeline, industrial vacancy rates will stay below 5%, according to a report from JLL. Tenants looking for large blocks of space in the Bay Area have moved into surrounding submarkets like the East Bay and Central Valley, where there is more availability.
The lack of new industrial supply has investors looking to refinance existing properties or upgrade older warehouse space. The JPMorgan Chase Commercial Term Lending team offers flexible loan options and has been able to finance loans using clients’ equity in their stabilized properties.
“Many clients have owned these properties for a long period,” Diggs said. “So we are able to finance that equity for our clients to do renovations and reinvest in their properties.”
YOU'RE WRONG!
With no new industrial development in the pipeline, industrial vacancy rates will stay below 5%, according to a report from JLL. Tenants looking for large blocks of space in the Bay Area have moved into surrounding submarkets like the East Bay and Central Valley, where there is more availability.
The lack of new industrial supply has investors looking to refinance existing properties or upgrade older warehouse space. The JPMorgan Chase Commercial Term Lending team offers flexible loan options and has been able to finance loans using clients’ equity in their stabilized properties.
“Many clients have owned these properties for a long period,” Diggs said. “So we are able to finance that equity for our clients to do renovations and reinvest in their properties.”
8
What is the JPMorgan Chase Commercial Mortgage Lending team providing to commercial real estate clients throughout the entire real estate cycle?
YOU'RE CORRECT!
Combining the knowledge of local experts with the resources of a world-class institution, JPMorgan Chase is able to finance commercial term lending across the entire Bay Area.
“We’ve got a strong team that has grown up doing real estate,” Diggs said. “Many people on our team were born and raised in the Bay Area and know these markets well. We’re able to offer our clients both the strength of a big bank along with local expertise and personalized customer service.
To learn more about this Bisnow content partner, click here.
YOU'RE WRONG!
Combining the knowledge of local experts with the resources of a world-class institution, JPMorgan Chase is able to finance commercial term lending across the entire Bay Area.
“We’ve got a strong team that has grown up doing real estate,” Diggs said. “Many people on our team were born and raised in the Bay Area and know these markets well. We’re able to offer our clients both the strength of a big bank along with local expertise and personalized customer service.
To learn more about this Bisnow content partner, click here.
