The Space Place

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Q4 2019 | Newsletter

Editorial & Advice for Tenants, Newsletter

4Q 2019 Office Market Performance

San Francisco, aka Camelot:

  • 11.8M square feet available (direct + sublease).
  • 9.3% total available. (UP from 8.3% in 3Q)
  • 3.3M sf under construction (will add 4% to total inventory).
  • Total Net Absorption, 4Q: 714,000 sf.
  • Total 2019 Net Absorption, 1.9M sf.
  • Market Size: 2,259 buildings; 123M sf.
  • Leasing activity / # of transitions lowest in more than 10 years.
  • During the last 45 days, over 1.4 million square feet of additional space came on the market… far more space than was absorbed during 4Q.

San Mateo County:

  • 5.7M square feet available (direct + sublease).
  • 9.4% total available.
  • 3.4M sf under construction (will add 6% to total inventory).
  • Total Net Absorption, 4Q: 334,000 sf.
  • Total 2019 Net Absorption, 1.17M sf.
  • Market size: 1,740 buildings; 54M sf.
  • Leasing activity / # of transactions lowest in more than 10 years.

Alameda/Contra Costa Counties: 

  • 12.8M square feet available (direct + sublease)
  • 11.2% total available.
  • 1M sf under construction (will add <2% to total inventory).
  • Total Net Absorption, 4Q: 716,000 sf.
  • Total 2019 Net Absorption, 1.7M sf.
  • Market size: 5,320 buildings; 114M sf.
  • Leasing activity / # of transactions lowest in more than 10 years

Santa Clara County (Silicon Valley)

  • 14M square feet available (direct + sublease)
  • 10.2% total available.
  • 7.2M sf under construction (will add 5% to total inventory).
  • Total Net Absorption, 4Q: 476,000 sf.
  • Total 2019 Net Absorption, 2.32M sf.
  • Market size: 4,515 buildings; 131M sf.
  • Leasing activity / # of transactions lowest in more than 10 years.

After reading through this Market Editorial, please see our collection of educational articles we’ve written for our tenant community.

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Calculate Your Space Needs
If Your Lease Will Expire Within The Next Three Years…
Or if there is another compelling reason to discuss your firm’s office leasing situation, please call us. For qualified tenants, we offer the following pre-contract services:

  • Free preliminary office lease and operating expense review;
  • Free consultation to discuss project management, Team formation and project schedule;
  • Market surveys and our specific tenant-driven leasing recommendations ; and
  • Assistance in selection and coordination of all Team members throughout planning and negotiation phases.
Vacancy Rates: Are Your Options Fading?
Tenants should watch carefully to detect how and to what extent your field of options changes. Which size blocks of space are getting leased? Discussing vacancy and absorption rates can be confusing to some. What language makes sense to tenants? Tenants ask, “Tell me about my specific options. How many choices do I have?” Are your options fading, as a result of leasing activity? If you’re a small tenant look alive, because smaller spaces continue to be less available than ever. Call and let’s discuss.
How many blocks of space are available for YOU? San Francisco County (Q4 2019) San Mateo County East Bay Counties (Alameda/CC)
5,000-9,999 sq. ft. 301 131 255
10,000-19,999 148 72 153
20,000-29,999 46 25 50
30,000-39,999 16 10 23
40,000-49,999 18 6 8
50,000+ 33 22 54

You can request a free space survey, containing all direct and sublease space meeting your specific requirements. We can also provide building photographs, floor plans, leasing histories, and more. To discuss your space needs in person, call 415-434-2820 or email Dan@TheSpacePlace.net

Five Brokerage Firms Control 8M SqFt of Space Listings in 440 Buildings Listed: How Do You Spell “Conflict of Interest”?
When we approach a prospective new tenant client, we tell them that we NEVER represent landlords, always avoiding this conflict of interest. So, which of our competitors—leasing firms—do the most landlord representation? Who’s marketing 78% of the space in San Francisco?

The top companies controlling the most space available are NOT landlords….Rather, they are office leasing brokerage firms acting with the landlord’s interest in mind. They are:

CBRE
JLL
Cushman & Wakefield
Colliers
Newmark, Cornish & Carey

These brokerage firms control over 61% of all listings and are beholden to more than 440 local landlords, paid to drive up rental rates and drive down concessions for tenants.

Since their allegiance is committed to so many landlords, how can they possibly represent YOUR interests—the tenant’s interests—objectively and aggressively?

Thank You to Our Clients & Friends

We believe that representing tenants – and only tenants – is a noble cause, our specialty for over thirty years. We greatly appreciate our clients’ confidence and kind words about us, our level of advocacy and enthusiasm to negotiate aggressively ….. and mind the details while guiding the leasing process. Thank you!

THE SPACE PLACE, INC.
505 Montgomery Street, Suite 1100
San Francisco, CA 94111
C: 415-999-9244 
T:  @MihalovichCRE
E: dan@TheSpacePlace.net
W: www.TheSpacePlace.net
License # 01376000