Posted by: BayAreaComRE | May 18, 2010

Market Update: “Things are Picking Up”

Sentiment in the commercial real estate market these days can be categorized by an term we are starting to hear more and more amongst brokers, developers, architects, contractors and the like; “things are picking up”. Whether that’s translating into true positive job growth and office absorption remains to be seen. Here’s a round up of some major deals that have closed in the last few weeks.

Ubisoft renews for 7 years at 625 Third Street – “The developer, publisher and distributor of interactive entertainment products extended its occupancy in the building under a new lease for seven years. The 42,429-square-foot office building, which includes classic brick and timber construction, was built in 1908 and upgraded in 1995.” Full story here.

Rampant Salesforce Grabs More Office Space – “Cloud computing behemoth Salesforce is growing again, absorbing another 153,000 square feet in two downtown San Francisco buildings. Salesforce will expand into 93,000 square feet of space previously occupied by Del Monte in the Landmark at One Market St., a building in which the company already has 125,000 square feet. In addition, Salesforce is in contract to take four floors at 123 Mission St., about 60,000 square feet.” Full Story here.

Yahoo’s Plan for 3 Million Square foot campus is approved – “The Santa Clara City Council last week approved the Sunnyvale, CA-based company’s plan, certifying the environmental impact report and approving a development agreement for 13 six-story office and research and development buildings, three two-story common buildings and two levels of underground parking on 48 acres that could accommodate up to 12,000 employees, according to city documents.” Full Story here.

Companies Shell out for View Space in San Francisco – “View space is back. Deals for upper floors with water views in trophy buildings, which topped out above $100 per square in the boom before evaporating in the bust, have reemerged. Rents have notched up to above $60 as top-dollar tenants start to emerge from hibernation.” Full Story here.

Tishman Sees Modest Value Rise – “A Tishman Speyer fund that includes two downtown San Francisco properties saw values inch up 2.2 percent since June 2009, another indication that Class A office values have bottomed out and are headed higher.” Full Story here.

  • Blue Shield renewed at 225 Bush Street, San Francisco in ~75,000 square feet for 5 years.
  • Atheros Communications moves HQ to San Jose (1700 Technology Drive) ~ 185,000 square feet for 7 years
  • Netflix renewed for 7 years at their HQ location (100-150 Winchester Circle) ~160,000 square feet
  • Walmart.com took 260,000 in expansion space at 850 Cherry Ave in San Bruno, formerly occupied and owned by GAP
Very promising numbers from the headlines and internal meetings. There’s less of the “impending doom” talk and more of a “activity is returning” sentiment. Our Bay Area COM Re Index is up 8.59% since inception. We are still outpacing the S&P 500 which is up 5.50% in the same period.
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Responses

  1. […] our coverage about tech being a major driver for the commercial real estate market (here, here and here). We’ve included an excerpt and the full report […]


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