New + Notable

Peninsula Offers Pipeline Office Space Options

As reported December 1 in GlobeSt.com.

Where are San Francisco Bay Area tech companies going to find enough office space to accommodate their immediate and explosive growth? The Peninsula is one option.

The entire Bay Area region–encompassing San Francisco, the East Bay, the North Bay, the Peninsula and Silicon Valley–has more than 15 million square feet under construction.

The Peninsula accounts for a fraction of this total–only 2 million square feet–but all of the submarket’s 13 buildings are delivering by 2017. Other than Salesforce Tower, most of the big projects with available space in the Bay Area will not deliver until after 2017.

Indeed, the Peninsula has the advantage of a development pipeline that offers options in the short term, even with rent increases in some areas. Class-A rent has increased by 12.5% from a year ago to $4.10, with notable year-on-year spikes of 18.8% to $4.71 in San Mateo/Foster City, CA and 13.9% to $4.41 in San Carlos/Belmont, CA.

Steven Lico, corporate managing director in the Savills Studley Palo Alto office tells GlobeSt.com: “While Peninsula office rents are generally increasing, tenants willing to consider Peninsula locations outside of the downtown areas of Redwood City, San Mateo and Burlingame will find good quality options where they can enter into leases with shorter terms (3 to 5 years) providing the flexibility most young technology companies require, and at rent levels that are favorable compared to markets to the north and south.”

Read the full article here.

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