Over 3 million square feet of office space was leased to tech Companies in San Francisco in 2017 – companies like Facebook, Amazon, Google and Dropbox – making it one of the strongest years on record for tech tenant leases. Seven companies signed for mega-blocks of space, leases that were for over 150K square feet, accounting for nearly 70% of the total space leased. The South of Market neighborhood saw most of the year’s leasing activity, and is reported to have the highest asking rent of any other neighborhood in San Francisco. 2017 overall saw an increase in asking rents, attributed in part to particular lease transactions, like the record breaking Facebook lease. The company rented all 436,000 square feet of 181 Fremont’s office space for its new headquarters, one of the biggest corporate leasing transactions in San Francisco’s ever, costing Facebook nearly $80 a square foot, or $35 million.
Economic expansion is expected to continue in San Francisco, so demand for space is expected to continue. However with even still more new constructions on the horizon, will there be too much space? And as tech companies expand there is a growing need for employees, which presents some challenges. While there is a lot of employment talent currently in the Bay Area, less and less people are moving into the area. That may be due to the high cost of living and transportation woes. But there has yet to be significant movement from tech companies to move out of the Bay Area, which many had predicted would be the case.