Technology Office Outlook
San Francisco Peninsula | Summer 2016
MARKET SCORE AND MATRIX POSITION
<market score>
77.5
Lower cost
Lower industry
opportunity
Lower cost
Higher industry
opportunity
Office supply
Office cost
Employee cost
27,079,928
$57.50
$224,000
$10,063
12.4%
13.3%
-3.5%
$234,063
total inventory
(s.f.)
total vacancy
12-month rent growth
Venture capital
Higher cost
Lower industry
opportunity
Higher cost
Higher industry
opportunity
<occupier opportunity>
overall direct asking rent
Population
average wage 2015
annual wage growth 2015
Talent pool
Total cost per employee
annual real estate cost
(175 s.f./person)
all-in cost
(real estate and wages)
Housing
$1,831.6M
1,629,951
45.9%
$2,865
-12.1%
3.4%
24.7%
0%
total funding Q315-Q216
y-o-y change in funding
total population
unemployment rate
% of population with
average monthly
bachelor’s or higher (age 25+) apartment rent
share of millennials
(work age, 20-34)
urban core premium
TOP LEASE TRANSACTIONS
450 Concar Drive | San Mateo
Tenant: Medallia
Size: ~210,000 s.f.
New lease
3025 Clearview Way | San Mateo
Tenant: GoPro
Size: ~107,000 s.f.
New lease
1400 Seaport Boulevard | Redwood City
Tenant: Guidespark
Size: 98,667 s.f.
Sublease
OPPORTUNITY
CHALLENGE
The San Francisco Peninsula lies in between the two greatest tech hubs
in the world: San Francisco and Silicon Valley. With a demographic
profile ranking high for educational attainment and a vibrant combination
of urban environment and rail transit, the region has been targeted by
growing tech tenants seeking a better value proposition than Silicon
Valley and San Francisco in terms of rents and space quality. The
various projects in the development pipeline are an attractive
proposition to secure large, high-quality tech space at a discount.
In a similar fashion than other markets in the Bay Area, the San
Francisco Peninsula faces an acute shortage of housing availability.
Rental rates for residential space have skyrocketed over the past 22
quarters despite a surge in residential development projects. Despite
boasting some of the highest salaries in the world, the high cost of living
in the Peninsula significantly shrinks the disposable incomes of tech
workers, prompting a few tech companies to be proactive in securing
living spaces for their employees.
CHANGE IN TECH EMPLOYMENT
Employment
2015
47,866
number
of jobs
2001
+5.0%
(y-o-y)
“Since 2014, Silicon Valley tech giants
have aggressively expanded their footprint
in the Peninsula, forcing smaller tenants to
re-think their real estate strategies.”
-1.3%
48,508
change since 2001
- Eduardo Romero
Senior Research Analyst
© 2016 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.