Depending on where you sit, it's either a golden year for San Francisco in terms of office space or one that's best forgotten.
The Bay Area continues to pack in the heat as the high rent in Silicon Valley results in a mass exodus. Feeling the pinch as Silicon Valley is not what it was once, tech companies are forced to move to San Francisco.
This only drove the prices of office space for lease in San Francisco up. According to Collier's exec, Alan Collenette, this is going to be the norm rather than the exception for San Francisco. That means, going forward, renting an office space in the Bay Area will be bloody.
Commercial rental prices often fluctuate on boom and bust cycles. There was a time when everybody wanted to be in Silicon Valley with the Dot Com Bubble. Now, tech companies are migrating because rental prices are skyrocketing. Instead, they relocated to nearby neighborhoods that are still close to Silicon Valley but keep overhead down.
Business Owners are untouched by High Office Space Costs in San Francisco.
Colliers said this time around, it's different for San Francisco when the world is moving toward a knowledge-based economy. The Bay Area lies at the center of it all, with major tech companies relocating there.
In fact, Collegiate said that the prime movers in this knowledge-based economy needed help to afford to skip San Francisco.
With the high demand, the city is scrambling to catch up. There are now more than 76 million square feet of office space in San Francisco, and it's still expanding exponentially. You think that 76 million square feet of property is substantial, but it doesn't dent the demand.
How to survive if you’re a Small Business in San Francisco
For companies, tiny and medium businesses with assets that couldn't compete with Fortune 500 companies, looking for a place is like finding a needle in a haystack. Fortune 500 corporations have no such problem because they can afford to take a hit despite the high rate.
Typically, rental rates represent about a third of the total overhead cost. That hurts if you are a small company just starting to take root. For instance, in San Francisco, a 2000+ square foot office space will likely cost you $8,000 a month. A wrong decision can quickly spiral your budget out of control.
If you are new to the Bay Area, you need a good partner who can get you the office you want within your budget. Office Finder is a website that can match you with a space in San Francisco to help you grow your business. It has a list of licensed representatives who know the city like the back of their hand.
Prime real estate in San Francisco includes the Financial District, South Financial District, Union Square, South of Market, Mission District, and Civic Center, among others. The fight to get office space in those areas will be very competitive. Depending on your requirements, the Office Finder will match you with the right tenant representative who can get you to those areas without blowing your budget.
