Where Will Tech Boomers Live?
Developers think today's tech companies are strong enough to flourish in their giant-sized leases. Now the issue is getting enough housing for the employees, according to experts at Bisnow's 3rd annual Construction & Development Summit at the Intercontinental yesterday.
Boston Properties senior project manager of development Michael Tymoff thinks the rebranded Transbay District—with Salesforce Tower at the epicenter—will be the 24/7 live, work, and play environment today's employees crave. He's seeing mature tech companies, established before 2004, leasing giant chunks. Salesforce Tower is designed with flexible floor plates and future tenants in mind. There's no doubt supply is constrained, he says. This week's land sales of 500 Townsend and Warriors' purchase in Mission Bay prove large blocks are being taken off the table at high prices.
Allen Matkins construction law wiz Raymond Buddie, who moderated, points out we're fortunate enough to be in a city where there is a huge engine generating our economic recovery. (Texas has oil, while we have oily-faced entrepreneurs.) More needs to be done to educate people in this voter-driven city on how good we have it and how to take advantage of additional housing. He knows a thing or two about public outreach; he was the mayor of Sausalito in the early '90s.
Shorenstein SVP of development Todd Sklar, whose company's investment funds own 22M SF of office space across a dozen US markets, knows S.F. is an anomaly and can't be red hot forever; in 10 years we might look back on today and say, "Gosh, those were the good old days." Twitter is the main tenant at Shorenstein's Market Square. Tech titans who have been around for a while like Microsoft and Apple aren't what they were 30 years ago and are making smarter real estate decisions, with enormous capitalization and investor responsibilities.
San Francisco Office of Community Investment & Infrastructure senior project manager Mike Grisso says the mayor's pledge to create 30,000 housing units by 2020 would go a long way. It won't bring rents down but would stop them from skyrocketing. Polls point to Prop B—which would limit waterfront development—winning by landslide. It may be too late on that one, he says. Building more market rate housing is part of the solution, and not just to feed demand; money for subsidized affordable housing comes from market rate, he points out.
Emerald Fund principal Marc Babsin calls his company the most prolific residential developer in S.F. history, having built 2,000 new housing units with 1,000 more in the works in three Civic Center projects. With $2,800 as the average one-bedroom price in S.F., professions like bartenders, yoga teachers and graphic artists typically don't make the $120k/year required. (Though we'd pay our bartender that much for a cold drink after hot yoga.) If people have to vacate, we are going to lose diversity of ages and income levels. The 65,000 new jobs created here since 2010 translates to 50,000 new housing units.