SAN FRANCISCO, CA — The San Francisco office market is enjoying a strong resurgence that is expected to continue through 2008, according to the 2008 National Office Report by Marcus & Millichap, the nation’s largest real estate investment services firm.
Tenant demand for office space is being driven by the ex
panding information sector, which is forecast to add another 800 jobs this year.
panding information sector, which is forecast to add another 800 jobs this year. Also included in the report is the firm’s annual National Office Index (NOI), a snapshot analysis that ranks 43 office markets based on a series of 12-month forward-looking supply and demand indicators. San Francisco moves up 12 places this year to No. 4.
“Buyers may find properties with upside potential in the South of Market Area and U
nion Square submarkets,” says Jeffrey Mishkin, (photo at right) regional manager of Marcus & Millichap’s San Francisco office. “Rents have risen rapidly in surrounding submarkets, including the Financial District and South Beach, and some tenants who are priced out of properties in these areas may move to less expensive regions nearby.” Following are some of the most significant aspects of the San Francisco Office Research Report:
· Employers are expected to add 10,200 jobs this year, a 1 percent increase.
· Builders are forecast to deliver 1.4 million square feet or new office space this year.
· Vacancy is projected to end the year at 9.6 percent.
· Asking rents are forecast to increase 5.8 percent to $42.46 per square foot, while effective rents advance 5.9 percent to $36.52 per square foot.
· With heightened demand for top-tier space in San Francisco, investors may find success upgrading existing properties, as rents continue to rise faster than the national average and elevated land and development costs minimize the threat from overbuilding.
In the 2008 NOI, Seattle moved up three places to secure the No. 1 spot, surpassing last year’s leader New York City, which slipped to No. 2. Boston moved up two spots to No. 3. Los Angeles slipped two spots, coming in at No. 5.
For a copy of Marcus & Millichap’s National Office Report and the complete NOI rankings, visit http://www.marcusmillichap.com/.
CONTACT:
Stacey Corso
Public Relations Manager
Marcus & Millichap
2999 Oak Road
Suite 210
Walnut Creek, CA 94597
Office: 925.953.1716
Mobile: 415.672.6460
Fax: 925.953.1710
http://www.marcusmillichap.com/
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