San Francisco’s commercial real estate market is in a construction boom, with 26 projects underway that will add 6.5 million square feet of office space within the City and Silicon Valley. These projects range from glass towers to office campuses to suburban business parks. Office space for rent in San Francisco is in high demand, as companies look to expand and are leasing space aggressively in order to lock in favorable rental rates. Technology firms in particular seek commercial space for rent in San Francisco, with more than one half of all current office lease deals going to companies in this industry.
San Francisco’s commercial real estate trends have been favorable recently, amid the economic renewal the state of California and the entire country has been experiencing. Leasing activity continues to drive growth in the sector, with top-market areas indicating an asking rental price of $60 per square foot, while middle-market areas command a tag around $50 per square foot. Office space is plentiful, with the total supply estimated at 73 million square feet with a vacancy rate at 11.2%. Rent will continue to increase on average by 10% in response to high demand. One clear proof of the hot demand is the relatively high percentage (51%) of commercial real estate that is under construction, yet has already been pre-leased.
Hot markets to look for in San Francisco include South Financial District, South of Market, North Financial District, Union Square and Mid-Market. One of the oldest neighborhoods in San Francisco, South Park, houses many of the most innovative technology companies in the World. Historical prewar homes have been developed into quaint and trendy office space with more warmth than traditional office buildings. The Mission Bay neighborhood, newly built on a landfill in San Francisco Bay, has seen a rapid growth of new office buildings and luxury condominiums. It now is a center for biotechnology companies and the new UCSF research campus.
Clean technology is one of the fastest growing sectors of San Francisco’s economy. A proposed clean technology campus, including a cleantech incubator, will add two million square feet of office space to accommodate the industry’s growth. Since the Gold Rush era, San Francisco has been a stronghold of the banking and finance industry; in the Great Depression, not one of San Francisco’s banks failed. Today banking and finance employs 28,000 in the city, with some of the highest average salaries. The birthplace of biotech, San Francisco continues to be a leader in life sciences and health care. Life science companies that have made their home in the city include FibroGen, Nektar, Celgene, Bayer, and Pfizer. San Francisco is a hotbed for digital media and other technology companies. Firms in the tech industry will find a collaborative and innovative atmosphere among such tech giants as Salesforce.com, Google, Riverbed Technology Advent, CBS Interactive, Adobe, Zynga, Autodesk, Wikimedia Foundation, and Twitter. The tourist industry contributes $8.2 billion to the local economy, welcoming 16 million visitors annually. Unemployment was a low 4.6% in 2013, but cost of living is a whopping 48.8% above the national average.
San Francisco is also called the City by the Bay, known for hilly terrain and breathtaking waterscapes. The Golden Gate Bridge is one of its biggest attractions, bringing in over 10 million visitors each year. The city has a Mediterranean climate of mild winters and dry summers, with many parts of the city prone to cool winds and fog.
San Francisco is probably the easiest city in California to navigate without a car, with many options available for commuters. The San Francisco Municipal Railway, known as Muni, serves more than 200 million riders per year, and is the seventh-largest transit system in the nation. The transit system includes a combined light rail and subway system, the Muni Metro (a light rail/streetcar system), and an extensive bus network. The Bay Area Rapid Transit system, known as BART, is a local commuter rail network, carrying commuters from the bustling Financial District all the way to San Francisco International Airport, connecting travelers from San Francisco, the East Bay, and the Peninsula. Caltrain, another commuter rail option, runs from San Francisco to San Jose. Many other transit options are available in this commuter-friendly city, including Amtrak, Megabus, and the San Francisco Bay Ferry.
The earliest recorded European visit to San Francisco occurred in 1769, when a party led by Don Gaspar de Portola found a settlement of the Ohlone people in a few villages along the San Francisco Bay. The Spanish colonists erected a Presidio and later the Mission San Francisco de Asís, from which the city got its name. The California Gold Rush of 1849 resulted in a population boom for San Francisco, increasing the number of residents from 1,000 to 25,000 in just one year. The City was destroyed in the 1906 earthquake and fire, which killed hundreds and left thousands homeless. The City was rapidly and aggressively rebuilt, and hosted the Panama-Pacific International Exposition just nine years later. Between 1950 and 1980 the city became a mecca for counterculture, and later developed into a center for the gay rights movement. Major high-rise development during this period, often termed “Manhattanization,” and the subsequent dot-com boom helped cement San Francisco’s reputation as one of the foremost centers for innovation and business worldwide.
San Francisco is the fourth most populous city in the United States with an estimated 2013 population of 837,442. With 17,867 people per square mile, it is the second-most densely populated major city in the nation. College attainment is second only to Seattle in high college attainment, with 44% of adults having earned at least a bachelor’s degree. Race and ethnicity data show San Francisco as a fairly diverse city; 48.1% of residents are White, 33.3% are Asian, and 6.1% are African Americans. Residents of Chinese ancestry, the single largest minority group in the city, make up close to a quarter of the city’s population.