July 2nd, 2009
Jones Lang LaSalle Ranked #1 Corporate Real Estate Provider
Normally this site is used strictly for market updates, useful to my clients. Today however I am excited to bring the news of some successes the amazing firm I work for has achieved in the most well respected of independent studies. This type of independent & unbiased stamp of approval is the reason I chose Jones Lang LaSalle when I switched firms two years ago.
“Jones Lang LaSalle has been recognized as the best overall provider of corporate real estate services by the Watkins 2009 Survey of Corporate Real Estate Service Providers. Of the 19 providers evaluated by the largest users of commercial real estate services, Jones Lang LaSalle was rated #1 in every category, including delivery of results, adaptability of services, pricing, reputation and financial strength.” (Read More…)
June 26th, 2009
San Francisco considers expanding Moscone Center
The following article from the San Francisco Chronicle, written by James Temple, explains in good detail the likely path to Moscone Center expansion.
This is a crossover issue for those of us in the commercial real estate world because one of the buildings listed as potentially being razed to create additional convention space is 680 Folsom, which has been advertised as available for lease over the past year. 680 was going to be rehabbed with a beautiful glass exterior prior to the economic downturn that has lowered lease rates and occupancy levels across the City. (Read More…)
June 16th, 2009
San Francisco suspends effort on Transbay District site
The following article from the San Francisco Business Times sums up the future, or lack thereof, of a full city block at First & Folsom in San Francisco.
We have reported on this site previously, and the inability to work out development plans for the property at this time speaks to the state of the market. If you work or live in the South Financial District or Rincon (Read More…)
April 10th, 2009
S.F. office rents drop 24%, sublease & direct space in competition
The San Francisco Chronicle reported this week that office rents have dropped in our great City 24% over a years time. This number is not surprising of course as we have seen a dramatic uptick in sublease space coming to the market, and some of that new sublease space is just that, brand new space.
In a traditional sublease scenario the current tenant (sublessor) is leaving space behind that may be old and dated, it may have a shorter term on it, or the sublessor may be in financial trouble and unable to offer tenant improvement dollars. In today’s market however there are plenty of financially viable tenants putting excess, newly built out space on the market. This newly built space with term left on the existing lease, despite being a sublease, can look and feel like a direct lease with the landlord.
What this does is undercut the landlords leasing efforts on their direct space because now the direct and sublease spaces are comparable. To a tenant seeking a new location there is no difference potentially between the two opportunities in the same building, thus leading to the landlord having to drop their asking rate dramatically to compete with the sublease asking rate. It also forces (Read More…)
March 29th, 2009
1st & Folsom bid process and a Transbay development update
John King of the the Chronicle discussed the latest updates this week for the First & Folsom development site in the South Financial District here in San Francisco.
The commentary is actually geared toward the veil of secrecy surrounding the bidding process, but the way King surrounds the story with historical context and also explains how the development fits into the larger submarket growth is more intriguing to me.
I am a big fan of King’s writing as I have stated and reading his work will make you smarter, as well as educate you about the future of the financial district’s vertical growth through transbay development. (Read More…)
March 27th, 2009
Duane Morris restructures, Schwab to vacate One Montgomery
Posts have been few and far between here at San Francisco Tenant Representation lately and I apologize for that. Fortunately I have been occupied assisting clients and as we have discussed, the market demands a great deal of attention on every transaction in this climate.
Below you will find a catchup list of events, developments, and transactions that have occurred over the past month or so. The biggest trend to pay attention to today, which has not quite shown itself in transactions yet, is the tendency right now for firms to put excess space on the sublease market… even if they only recently signed leases for this space. The best examples comes from 555 Mission, which is a beautiful new building trying hard to fill direct space. Two of the newest tenants to the project have already listed space for sublease, before ever taking occupancy of that space.
Economic Downturn Tests Sector Resilience Globe Street/ March 23rd, 2009
Duane Morris Restructures One Market Lease Costar Group/ March 11th, 2009
Law Firm Moving to 3 Embarcadero Center Costar Group/ March 11th, 2009
Architecture Firm Buys Historic San Francisco Building Costar Group/ February 25th, 2009
Bebo Co-Founders Buy Musto Plaza for $7.25 Million San Francisco Business Times/ March 20th, 2009
$30M Redevelopment for One Market Retail San Francisco Business Times/ March 13th, 2009
February 22nd, 2009
Cannon Design to 201 Mission, Marriott International to 45 Fremont
Cannon Design has signed to take 9,000 square feet at 201 Mission Street according to the San Francisco Business Times, and the Costar Group has reported that the administrative offices of Marriott International has leased 19,000 square feet at 45 Fremont.
The 201 Mission lease was actually a sublease, 1/2 a floor from the Lexis Nexis, while the Marriott lease was on a direct basis from Shorenstein, who represented themselves. These two transactions don’t tell us very much about the direction of pricing in the marketplace, but they do let us know that activity is occurring and some tenants are deciding that now is the time to dive in and commit to future costs. As I have mentioned previously, timing the market can be dangerous (Read More…)
February 13th, 2009
Skyline Review breaks down space availability in downtown San Francisco
The San Francisco Chronicle this past week covered a report that was created by my firm, Jones Lang LaSalle, that details the available office space in downtown San Francisco.
Our research department truly does outstanding work, and for this report the data was given a beautiful visual representation by our great graphics people. Normally I don’t cover our reports on this site, but rather I try to focus on real events that occur in the marketplace that have a direct affect on what my clients may pay in rent. In this case however I am proud to be associated with such professionalism and I am certain this type of support makes me a better agent.
Despite the associated picture only detailing 11 properties, the original piece details San Francisco’s top 30 buildings and includes written market updates and relevant recent news and information. I would be happy to supply you with a hard copy of the report, feel free to reach out to me if you are interested in getting a hold of a physical copy. (Read More…)
January 30th, 2009
Norcal Waste takes 20,000 square feet at 50 California Street
50 California Street has signed up a real and credible tenant of significant size in San Francisco’s financial district during a period of otherwise relatively slow leasing activity. Norcal Waste, currently housed at 160 Pacific but with subsidiaries scattered across the Bay Area (including some composting and landfill operations), has leased almost 20,000 sqft as reported today by the San Francisco Business Times.
This lease is significant to office tenants here in San Francisco for two reasons. First and foremost, any lease of this size signed in the financial district during our current recession is newsworthy because most tenants are waiting for future pricing declines before taking space if they are able to. That being said, trying to time the market is not advised and if the right opportunity presents itself you have to be prepared to strike, and it sounds like this space is a great fit for Norcal.
Secondly, as you will discover in the story by J.K. Dineen below, there is some back story to how this deal happened including a signed Letter of Intent that did not lead to a lease at a different location. I know nothing about how this process unfolded but I do know that over the past few months, as the market has declined, it has become the norm for tenants to ask for rental rate reductions (Read More…)
January 26th, 2009
888 Brannan Street Jewelry Mart repositioned for office use
The new owners of the long time home of the San Francisco Gift Center and Jewelrymart have begun their expected transition of the property by announcing the introduction of an office component. The Eastern Neighborhoods Plan, recently approved for implementation, allows a mixed-use to take place that drastically improves the market value of the property by increasing what the owners will be able to charge in rental rates.
As you will see below in the article from the San Francisco Business Times, the SOMA/ Showplace Square area in which 888 Brannan is located suffers from high vacancy numbers yet it enjoys high rental rates at the same time. These two numbers normally work against each other but the uniqueness of these neighborhoods create a marketability to tech tenants and smaller tenants that is not comparable to other submarkets. Also, the great majority of available space is tied up in large properties that are still undergoing a transition and not necessarily suitable for a 5-25K sq ft user, 370 Third and 1355 Market Street being the best two examples.
From a tenant’s perspective this is welcome news. (Read More…)
