Starboard Commercial Real Estate

Hans Hansson | December 30, 2010

Around the United States, traditional office space markets are taking a back seat to an unconventional and newer office product. Today, the conservative lobby and classic look is out in favor while non-traditional aesthetics are gaining popularity.

San Francisco is a perfect example. The city's financial district was for years identified as offices on the north side of Market Street. All of the major high-rises were built between Market Street and Sacramento Street to Kearny. Even in the 1980's when construction began on new modern office buildings no firm would venture to Spear Street. Every firm believed that their location in the north side signaled to the world that they had made it and could be counted on because of their close proximity to other offices.

Today a very different belief system is now in place. Firms are not looking to be like all other firms but to set themselves apart, to be competitively different. Today's work force is looking to team with firms that offer creative spaces in vibrant, edgy areas that offer restaurant and support services and define being different.

Warehouse conversions now offer new sustainable office buildings that create green workspaces and are what people are looking for. What has resulted is that in core financial districts, rent is actually cheaper than in the more unconventional areas available. Today in the north financial district it is possible to secure a Class A office space for a low 30's rental number. 116 New Montgomery Street is an example of a classic turn-of-the-century building that has been converted into high-ceiling open type space now in the low 30's in south of Market. Small boutique buildings in south of Market off of 2nd street are going to high 20's net of services whereas Class B buildings through the north financial district are going to mid 20's rents including all services.

If your firm is looking for rental value look to the core financial districts in your market. You might be surprised at the bargains that await you.
Posted 8 years, 9 months ago on December 30, 2010
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Comments on this post:

Re: Come to the North Side for Cheaper Office Space
Thanks for the tip. I guess developers on the north side are finally recognizing people's need for more affordable office space, especially since a lot of them are downsizing their corporate spending.

2011/01/14 by Real Estate Vietnam wwwReply
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Re: Come to the North Side for Cheaper Office Space
This blog has broadened my horizon about how the north can sometimes change the whole perspective on things. This is very beneficial information.

2011/01/18 by Real Estate Investment Software wwwReply
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Re: Come to the North Side for Cheaper Office Space
I absolutely agree!

2011/01/20 by Yoav • • Reply
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Re: Come to the North Side for Cheaper Office Space
This is a well thought out commentary and what I find particularly interesting in assisting clients with the 'planning for the next 3-5 years' is their loyalty to a broker who only shows them space he is exclusively marketing. There are incredible deals out there, subleases and full floor plates. The inventory south of Market could be better for certain size requirements, however that too will change as the years progresses. The next wave of startups is happening - price will always be driven by what the market will bear....did someone say bear?

2011/01/21 by Real Estate Consultant to High Tech • • Reply
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Re: Come to the North Side for Cheaper Office Space
Since I wrote that article things on the north side have also tighten up with rents moving up as well. I was quoted $52.00 a foot last week for a space I looked at towards the end of last year in the mid 30's

2011/03/03 by Hans Hansson • • Reply
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