San Francisco's office rents have just outperformed Manhattan's costly office spaces and is now considered the most expensive in the country.
According to NY Times, the flourishing technology sector and the short supply of commercial properties have driven average office rents in San Francisco to skyrocket as landlords are reportedly asking for $72.26 per square foot in the fourth quarter of last year, as reflected on the new report by commercial real estate services and investment firm CBRE. On the other hand, the report has stated that Manhattan rent is known to be at the $71.85 a square foot. The report further states that rental prices in San Francisco went up by 14 percent in 2015, while rental prices in Manhattan rose only 7 percent. Rents are projected to continue rising through 2017.
According to director of research and analysis at CBRE Colin Yasukochi, during a phone interview, around 29 percent of the office space in San Francisco is occupied with tech tenants, and that figure is twice the percentage that prevailed during the height of Internet boom. The growth in the technology sector dominates everything in the city.
With that, Yasukochi reportedly said, "The market here in San Francisco has been largely driven by the tech industry, which has really been one of the growth leaders coming out of the recession. Manhattan is more dominated by financial services firms who were not on that same growth trajectory coming out of the recession."
According to NY Times, an online apartment rental firm Zumper has reported that rents for a one-bedroom flat in San Francisco are also considered the most expensive in the country. Because of the expensive rent of both office spaces and some residential spaces, many tech companies are said to have abandoned the Bay area to settle for the less expensive boroughs in nearby cities.
