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100,000+ square Feet Office Space Availabilities in San Francisco

With a recent slowdown in VC investing in the Bay Area, coupled with a significant amount of new construction hitting the market within the next 6 – 24 months (think Salesforce Tower, 181 Fremont and the like), we put together an infographic showing the large blocks of office space available now (both direct and various sublease options) and included new construction that will come online in the near future in San Francisco, all over 100,000+ square feet. Think of all those cranes in San Francisco that are nearing completion!

Even with a large number of tech companies seeking expansion space in San Francisco currently (think NerdWallet, Slack and others), there are many more large blocks of office space available compared to the amount of tenants currently looking for new space.

CONTIGUOUS BLOCKS OF 100,000+ SQ. FEET:

Address (Building Name) Sq. Ft Available (+/-) Contiguous (Y or N?) Date Available
250 Howard Street (Park Tower) 751,500 Y Oct 2018
598 Brannan Street 700,000 Y TBD
1800 Owens Street (Exchange on 16th) 680,000 Y July 2017
415 Mission Street (Salesforce Tower) 592,719 Y April 2017
211 Main Street 433,768 Y May 2018
181 Fremont Street 412,776 Y Jan 2017
100 Hooper Street 400,250 Y June 2017
215 Fremont Street 305,502 Y Now – March 2018
500 Howard Street 227,632 Y April 2018
350 Bush Street 198,094 Y February 2017
Pier 70 184,000 Y TBD
121 Spear Street 169,628 Y Now – Aug 2017
655 Montgomery Street 167,302 Y Negotiable
2 Rincon Center 166,094 Y Now – Aug 2017
201 Spear Street 114,192 Y Feb-17
560 Mission Street (upper block) 144,986 Y October 2017
303 Second Street 133,808 Y Now – Feb 2017
201 Mission Street 130,674 Y Negotiable
50 Beale Street 114,804 Y October 2016
650 California Street 112,142 Y Vacant
560 Mission Street (lower block) 108,092 Y October 2017
1 Tenth Street 104,850 Y Vacant
101 California Street 104,483 Y 1 – 30 Days
375 Beale Street (MTC Building) 103,892 Y Now
185 Berry Street (Berry Building) 102,329 Y Now
525 Market Street 102,054 Y Now – March 2017
One Embarcadero Center 100,215 Y Feb – Oct 2017
TOTAL 6,865,786
*Office Space Inventory as of October 2016

NONCONTIGUOUS BLOCKS OF 100,000+ SQ. FEET:

Address (Building Name) Sq. Ft Available (+/-) Contiguous (Y or N?) Date Available
101 California Street 210,780 N Now
525 Market Street 193,386 N Now – March 2017
560 Mission Street 186,897 N Oct 2016 – Oct 2017
One Montgomery Street 160,543 N Vacant
One Embarcadero Center 148,056 N Now – Oct 2017
315 Montgomery Street 140,839 N 1 – 30 Days
Four Embarcadero Center 126,111 N Now – Dec 2017
1301 – 1355 Market Street 119,370 N 1 – 30 Days
650 Townsend Street 115,881 N 1 – 30 Days
55 Second Street 113,570 N Now – April 2017
185 Berry Street 112,378 N Now – Oct 2017
875 Howard Street 107,404 N Now – April 2017
1455 Market Street 104,521 N Now
100 California Street 102,288 N Now – July 2017
275 Battery Street 101,068 N Now
TOTAL 2,043,092
*Office Space Inventory as of October 2016
Square feet available in 2016: 2,343,028
Square feet available in 2017: 2,823,511
Square feet available in 2018: 1,412,900
Square feet available in 2019+: 2,329,439


Contiguous and Noncontiguous Office Space Availabilities in San Francisco
Larger than 100,000 Square Feet As of October 2016

Large Block Availability

With a lot of industry chatter about growing companies needing large blocks of office space (think Lyft, Atlassian, Credit Karma, & more), here is a look at the availability of buildings that have at least 100,000 square feet of office space available in San Francisco:

CONTIGUOUS BLOCKS OF 100,000+ SQ. FEET:

Address (Building Name) Sq. Ft Available (+/-) Contiguous (Y or N?) Date Available
250 Howard Street (Park Tower) 751,500 Y March 2018
1800 Owens Street (The Exchange on 16th) 715,000 Y July 2017
415 Mission Street (Salesforce Tower) 700,000 Y April 2017
350 Bush Street 432,978 Y February 2017
181 Fremont Street 410,313 Y November 2016
100 Hooper Street 400,250 Y June 2017
215 Fremont Street 305,502 Y Now – March 2018
500 Howard Street (Foundry Sq. IV) 224,874 Y April 2018
Pier 70 184,000 Y TBD
999 Brannan Street 150,000 Y Now
560 Mission Street (upper fl. cont. block) 144,986 Y October 2017
50 Beale Street 114,804 Y October 2016
560 Mission Street (lower cont. block) 108,092 Y October 2017
375 Beale Street (MTC Building) 103,892 Y Now
185 Berry Street (Berry Building) 102,329 Y Now
*Office Space Inventory as of December 2015

NONCONTIGUOUS BLOCKS OF 100,000+ SQ. FEET:

Address (Building Name) Sq. Ft Available (+/-) Contiguous (Y or N?) Date Available
525 Market Street 285,341 N Now – August 2016
101 California Street 210,780 N Now
2 Embarcadero Center 207,328 N Now – August 2016
201 Mission Street 202,112 N Now – August 2016
3 Embarcadero Center 179,569 N Now – April 2016
650 California Street 172,296 N April 2016
4 Embarcadero Center 159,249 N Now – June 2016
315 Montgomery Street 140,930 N Now – April 2016
185 Berry Street (Wharfside Building) 110,654 N Now
1455 Market Street 104,521 N Now
275 Battery Street 101,068 N Now
*Office Space Inventory as of December 2015

 
With a significant amount of new supply coming available in 2016 and beyond, will vacancy rates switch direction and head up???

San Francisco’s Influx of Subleases

A significant indicator of the changing commercial real estate market in San Francisco is the influx of sublease space hitting the market. Over the last three years, the subleasing market has been virtually nonexistent for large blocks of space, but we are now starting to see these large subleases become a growing trend. Below is a partial list of larger subleases (over 40,000 square feet) currently available in San Francisco:

ADDRESS SQUARE FOOTAGE SUBLESSOR
3 Embarcadero Center 98,066 Morgan Lewis
1 California Street 95,730 Salesforce
235 Second Street 76,516 CBS Interactive
123 Mission Street 70,989 Salesforce
600 Montgomery Street 54,645 AE Com
1455 Market Street 48,876 RocketFuel
1455 Market Street 48,845 Square
600 Harrison Street 40,428 IZ-ON Media

What could this sublease trend mean for the future of the commercial real estate market in San Francisco?

Skyline of the Future

With many development projects underway and others still in the works, San Francisco’s skyline continues to rise to new heights and expand into new neighborhoods south of the original downtown core. Below is a comparison of SF’s current skyline with the potential skyline of the future.

CURRENT:

blogPic1.jpg

 

FUTURE:

blogPic2

 

Are you a fan of San Francisco’s changing skyline?

San Francisco Rising

Have you noticed the influx of traffic, scaffolding, and cranes?   It’s hard to miss it these days in San Francisco. With all types of real estate booming in San Francisco, seeing cranes all around us has become a regular part of our skyline. Our city is experiencing its highest level of real estate development in more than a decade, and it shows little sign of slowing down.

Looking just at new office buildings, or mixed use properties that include office space, it is noteworthy that most new office developments are already full or partially leased by large tech companies.   Those include the likes of Dropbox, LinkedIn, Salesforce and Trulia.

Some of the largest and most notable new development projects in San Francisco that are already under construction are presented in the following chart (as of November 2014):

PROPERTY TENANT SQUARE FEET +/- % PRE-LEASED
85 Bluxome N/A 55,000 0%
333 Brannan Dropbox 185,000 100%
345 Brannan Dropbox? 102,585 100%
350 Bush N/A 372,000 0%
181 Fremont N/A 404,000* 0%
350 Mission Salesforce 420,000 100%
415 Mission Salesforce 1,400,000 50%
535 Mission Trulia 303,780 20-25%
222 Second LinkedIn 450,209 100%

Chart above is in alphabetical order, by Street address.

* 181 Fremont is a mixed used property. 404,000 sq. ft. is the office portion (plus 74 +/- condos coming soon).

NOTE: The list above includes office buildings where construction has already begun (not including “planned” developments. There are many additional proposed developments in San Francisco, some of which will be built (only time will tell).

In summary, all of these buildings above are projected to be completed within the next 2-3 years. Within that time frame these new properties will bring an additional 3.7 million square feet of office space, of which 1.75 million square feet +/- is still available.

The question is, will this all hit the market and drive up vacancies, or will more tenants continue to prelease this new construction before it hits the market?

Why Efficiency Matters

Ever hear about a load factor? Or, know what it is? And, why should it matter to you? First, let’s define a load factor. A load (aka efficiency) factor is the percentage of an office building that is common area (think lobby, common corridors for a multi-tenanted floor or building, but excludes outside spaces and excludes staircases and elevators). A load factor is also the difference between the rentable square footage (that tenant’s pay rent on) and the usable square footage within a tenant’s office space.

Tenants in San Francisco pay rent based upon “rentable” square footage. Rentable square feet = Usable square feet + Load factor.   In many buildings in San Francisco, especially those with large lobbies and many multi-tenanted floors, have load factors in the 25 – 30% range (sometimes even higher). Think about, that means in many cases the rent you pay goes up by 25 – 30% or more than the usable square footage within your office space.

How do tenants minimize this cost? First, the fastest way to reduce your load factor is to lease a full floor space (instead of a suite on a multi-tenanted floor). Forget multi-tenanted floors, if you can avoid them. With a full floor, there is no long corridor and that means your space is more usable and efficient. Most full floors in San Francisco have lower load factors, typically in the 15 – 19% range, on average.

Case Study:

Scenario 1: 5,000 Rentable Square foot Tenant Leases Space in a Multi-Tenanted floor.   With average rents in 2014 in many building nearing $60 per square foot per year, let’s use a rental rate of $60 per square foot per year.   This tenant’s rent would be $300,000 per year ($60 x $5,000), or $25,000 per month. Using a 25% load factor, that means this tenant only leases 4,000 “usable” square feet within their suite.

Scenario 2: That same tenant leases a full floor with a 15% load factor.   Using the same 4,000 “usable” square feet (so our analysis is apples to apples), that would equate to 4,600 square feet (4,000 x 1.15), using a 15% load factor.   This Tenant leases 400 square feet less, equal to about 9% smaller office space, yet benefits from the same 4,000 “usable” square feet, but at a much lower rent amount. At the same $60 per foot per year rental rate, this tenant saves $24,000 per year in rent ($2,000 per month).   That is real money in your pocket.   And, for larger tenants, the savings are even more dramatic!