December 29th, 2008
Real stats, real numbers: 2008 market wrapup
As the year grinds to an end and we look back at the recent damage that has been done to our great Country’s financial markets I thought it would be beneficial to my clients to publish some real data. We are all well aware by now of what has happened to the stock market, the unemployment rate, and of course the equity of some of our most famous corporate institutions. How all of this will have an affect on San Francisco’s commercial real estate rental rates and vacancy numbers has yet to be determined however.
What we do know is that in the most general of senses rental rates are dropping, building values are dropping, vacancy rates are increasing, sublease space is increasing, and the velocity of deals happening in the marketplace is at a minimum. The uncertainty surrounding what 2009 will bring and what affect the bailout will have on the economy has left most of us doing whatever we can to cut costs and be efficient moving forward. This mentality applies even to those companies with strong financial statements and well sought after products and services.
I have attached to this posting a 4th Quarter analysis of all the important data surrounding commercial real estate here in San Francisco. You can download that information here. In this document you will find current rental, vacancy, absorption, construction, and square footage numbers broken down and analyzed by submarket. The most interesting trend to me is that pricing is down primarily in the financial district, and not as dramatically in the outlying areas such as near the ballpark or near Levi’s Plaza. This is primarily because the firms that have taken the biggest losses have been hedge funds, private equity firms, banks, and law firms. All of these industries tend to seek space as close to the central business district as possible.
If there is anything I can do to help you as a Tenant Representative in the commercial real estate world, please do not hesitate to get in touch with me.
Thanks for visiting,
Tom Poser, Jones Lang LaSalle, San Francisco
www.sanfranciscotenantrep.com
Coit Tower Photograph Courtesy Philip Greenspun
