From the May issue of the New York magazine: San Francisco, one of the hottest office markets in the U.S., could be in store for a wake-up call should startups in the technology industry begin to fall short of expectations, the Wall Street Journal reported. The tech sector overall occupies 22 million square feet or 29 percent of the entire city’s office market, according to CBRE Group. That’s up from an estimated 15 percent in 2009.
The spike in demand is being spurred by a strategy known as “space banking,” in which companies lease more space than they need because they are afraid of getting priced out of the market in coming years. Yet should the tech market turn, they could be stuck with overpriced real estate. Salesforce, which occupied 1.4 million square feet at the end of 2015, has plans to lease an additional 714,000 square feet at the under-construction Salesforce Tower, a 61-story building that is set to be the city’s tallest. [more]