Colliers International Uncovers Rental Rate averages form a straight line across the board
SAN FRANCISCO, November 14, 2012 Colliers International in San Francisco announced year-to-date rents have little variance between its submarkets compared to the large disparities in 2000. Average Class A North and South Financial District rents set records back in 2000, reaching $81 and $78 per square foot, respectively. However, due to today’s tenant demand and preference average rents reached equilibrium across the city’s most notable submarkets.
During the course of 2000, there were 13.7 million square feet of leasing transactions, and citywide vacancy was 3.6 percent. All office space was at a premium, which explains the skyrocketing numbers in its established submarkets. SOMA and Mid Market submarkets were still emerging,
Today, while there is a healthy amount of leasing activity in the market, tenant growth is much more sustainable. 2012 is expected to log 8.1 million square feet of leasing transactions, of which 63 percent came from the technology sector. Citywide vacancy is expected to be 10.7 percent by year end. The dominance of the technology sector and its preference for non conventional space is evident in the year-to-date effective rents. SOMA rents, which includes both Class A and B rents in the SOMA East and West submarkets average $50, at least $2 per square foot more than Class A average rents in both the North and South Financial Districts. The growing popularity of the MidMarket (MidMa) submarket has pushed average MidMa rents even in that once unfashionable submarket to just below the citywide average. Class A and B rents in this up and coming submarket average $44 per square foot, although it is anticipated that the recent Square transaction at 1455 Market may place MidMa exactly in line with the Financial District and SOMA.
About Colliers International
Colliers International is the third-largest commercial real estate services company in the world, with over 12,300 professionals operating out of more than 522 offices in 62 countries. A subsidiary of FirstService Corporation, it focuses on accelerating success for its clients by seamlessly providing a full range of services to real estate users, owners and investors worldwide, including global corporate solutions, brokerage, property and asset management, hotel investment sales and consulting, valuation, consulting and appraisal services, mortgage banking and research. Commercial Property Executive and Multi-Housing News magazines ranked Colliers International the top U.S. real estate company. The latest annual survey by the Lipsey Company ranked Colliers International as the second-most recognized commercial real estate firm in the world.