Why San Mateo Isn't Taking Off
Avison Young just released a bold research report this morning, explaining why companies aren't expanding into San Mateo County. (It's bound to be more interesting than most of the Alex Cross novels.)
The vacancy isn't dropping and has instead been trending upward, Avison Young SVP Tim Grant tells us. That's defied the face of "everything else around us," he says (sounds like the Matrix), who reps both tenants and landlords throughout the Peninsula. athenahealth, for instance, is moving from Bay Meadows in San Mateo to SoMa's 50-60 Hawthorne in 56k SF this fall. The available 45 contiguous blocks in San Mateo 30k SF and up over the next year makes up a whopping 11% of all space available in the county; S.F.'s 55 available spaces that size account for just 3.3%. San Mateo's average Class-A rates are great compared to other areas (27% lower than those in S.F. and Palo Alto); the problem lies with location, Tim tells us.
More and more companies want to be a in 24/7 environment with walkability to transit, food, and entertainment, he says, snapped here with managing director Randy Keller, who also worked on the report. A lot of San Mateo's product is built east of 101 corridor--where there's no Caltrain. While a lot of projects offer shuttle service, it's one more layer of transit an employee has to look at, Tim says. It also makes a difference when there's a two vs. 10-minute stroll to amenities, or in the case of downtown, a 30-second commute to Starbucks. (Followed by a 20 minute line.) There are 22 companies in the market for over 30k SF in San Mateo County, or 1.3M SF, over the next two years; that compares to 69 in S.F. looking for 5.3M SF, according to the report.