Office Rent Forecast 2014-2016

With demand for office space in San Francisco at an all-time high and office rents having increased 15 percent over the past year and nearly doubling since the first quarter of 2010, Cushman & Wakefield is forecasting that office rents in the city will increase by another 6 percent a year in 2015 and 2016.

If the forecast holds, the average annual rent for Class A office space in San Francisco will be around $72 in San Francisco in 2016, 8 percent less than in Manhattan ($78) but 14 percent more than in Boston ($63), the city which is forecast to experience the greatest world-wide growth in office rents over the next two years “as technology companies continue to migrate towards central Boston in an attempt to tap into a highly skilled labor pool.”

As we noted last month, office rents in Oakland are currently running at half the cost of being in San Francisco.

Comments from Plugged-In Readers

  1. Posted by Sam

    Yes, please let Boston become the tech capital of the country. It’s already bro-ish and a place I’d be fine never visiting again.

    • Posted by Spencer

      Boston (well Cambridge) has recently taken over SF Bay Area as the jobs leader in biotech, mostly due to a great plan of tax breaks put in by MassBio organization 10 yrs ago. of course, having MIT and Harvard next door is helpful. SF was never really able to pull off Mission Bay, but South San Francisco is still going strong as a solid 2nd to Cambridge. The regional politics of Greater metro Boston are much more aligned than that of our fragmented bay area.

    • Posted by Spencer

      why would you want SF to lose the title of “tech” capital? That is what puts SF on the world stage and makes our economy do so well. Its what we are known for. Do you prefer we go the route of Detroit?

      • Posted by Spencer

        taking it a step further, SF should be doing everything it can to attract and keep tech companies, including tax brekas where needed. the amount of revenue and jobs far outweighs and perceived problems.

      • Posted by Sam

        I prefer we have a balance of professions here, instead of such a huge influx of people all making 6 figures that are open to spending 3k median on a small one bedroom. It’d be nice for average people to afford to live here, for musicians, artists, bohemians.

        • Posted by Spencer

          so you want it to go back to where it was, when SF was a small regional city not on the world map.? i kind of like having some of the smartest people in the world here and a booming economy. Im not in tech by the way, but am benefiting like 95% of the city from the economic boom spurred by tech

          • Posted by Sam

            Yes, I guess that is likely what I want. The only way I benefit is by eating at a few of the extremely good, and high priced, restaurants that seem to open weekly.

  2. Posted by Dave

    Prices are too high for even some tech companies. Plus the office space cap will make it worse.

    Interesting that news of tech companies coming to SF is scant. Maybe the boom is over. Google just took massive amounts of office space in Bay Area, some of which will stay empty for years, in anticipation of adding tens of thousands of jobs. They did not take any SF office space and have only a small presence in SF.

  3. Posted by Bob

    Uh yeah, except for that whole “Salesforce buying 50 fremont” and “taking majority of the new tallest building in SF”

    • Posted by Dave

      The exception that proves the rule. Smaller tech companies in SOMA that want to expand are more and more looking outside SF.

      • Posted by Anon

        cite some evidence please, Dave

        • Posted by Anon

          as we are told demand is actually at an all time high, above

      • Posted by lyqwyd

        The tech company I work at just expanded in SF.

  4. Posted by JR "Bob" Dobbs

    I’m sure some “tech companies” in SF are choosing to expand elsewhere because if it pricey here, or for other reasons. And I’m sure some are choosing to move to or expand in SF for a host of reasons.

    Same goes for law firms, and bio-tech firms, and financial services firms, and insurance brokers, and on and on. Pretty silly to try to generalize based on very limited anecdotes. Bottom line is that demand remains high and SF office space prices continue to rise. Kind of hard to convincingly argue that demand is slack from that.

  5. Posted by R

    Nobody wants to have their tech company in San Francisco anymore. It’s too crowded with other tech companies.

  6. Posted by The Milkshake of Despair

    I’m surprised that the only Asian city that made the chart is Jakarta. Aside from Tokyo, none of the tech capitals appear. I thought that Bangalore, Shanghai, Delhi, and Hyderabad were booming.

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