Over the past few years the demand for properties in San Francisco has risen sharply highlighted by numerous real estate deals that have showcased this particular desire. The recent purchases in the downtown area have madeproperty management San Francisco firms really take notice that the current boom in real estate shows no signs of slowing down.
The Rockefeller Group recently sold 50 Beale Street, a 660,000 square foot skyscraper that is sound of Market to the Paramount Group of New York for $395 million. At the same time the Hanford Building, a 33 story, 480,000 square foot office tower was purchased by the Columbia Property Trust of Atlanta. These two particular deals have really highlighted some of the recent purchases in the region which have only fortified San Francisco’s place in terms of demand for real estate.
Building Occupancy & Leasing Activity is Up
Over the past year, the number of office buildings with at least 50,000 square feet available has shrunk from 31 down to a single building. In addition, the rents for the upper floors of the office towers in San Francisco are now the highest in the world, surpassing New York and London. With an increase of 60 percent just in the past several months, the expectations are that office rents will continue to grow at a rapid rate over the next five years.
There is no singular reason for the rise in demand for office space in the city, but rather a combination of smaller reasons that have create a perfect storm of rental increases that reflect the high competition for building spaces. In addition, investors of all types are now taking advantage of the higher rents and are purchasing properties in the area as well.
The growth of the tech industry, lower unemployment and favorable conditions of living in San Francisco seems to have helped in pushing the demand for more rental space in the area. With large buildings having their rental space quickly diminish, the prospect of what will happen in the near future has been on the minds of many who are considering investing in real estate properties.
The Future of Rental Properties in San Francisco
With everything seemingly going so right, the natural tendency is to imagine what might go wrong that would end this powerful growth trend. For many in the community, there is nothing on the horizon that indicates this particular growth period will end anytime soon.
Of course, there are unforeseen events that may arise, such as a bearish stock market or economic collapse that could alter how investors see the San Francisco area. But right now there is nothing seen that will stop this rise in demand. The long term leasing combined with companies that are not overextending, but instead using the properties that they have rented has helped to strengthen the overall trend in growth as well.
Therefore, property management San Francisco firms will continue to have their properties rented at higher rates in the near future with the trend continuing to go up until it finally reaches that point where the demand will slacken for some unforeseen reason.