As high-tech companies continue to snatch up prime office deals, San Francisco is on track to become the US’s most expensive commercial rental market by the end of 2015, according to a recent CBRE analysis. Office rents in San Francisco are set to exceed Manhattan prices for the first time since the dot-com boom. Nearly three-quarters of the office leases signed through June were by tech companies, according to CBRE. Prices are expected to hit $69.71 per square foot by the end of 2015, an increase of about 18 percent from $59.28 in Q2.
“Within preferred submarkets, which, in many cases, are the neighborhoods of choice for millennials and high-tech companies, vacant space has become increasingly scarce. As a result, nearby submarkets may see increased leasing activity by tech companies,” writes Colin Yasukochi, Director of Research and Analysis for CBRE Global Research and Consulting.
By comparison, rents in Manhattan are predicted to increase by just 65 percent to $69.68 per square foot by the end of next year. Leasing from financial firms, New York’s prime tenants, have not been able to keep up with the steady growth of tech, media, information and advertising companies, according to CBRE.
