First Quarter 2011 • San Francisco • Office Report SAN FRANCISCO OFFICE
Lic #00832933 One Bush Street, Suite 400 • San Francisco, CA 94104
Tel: 415.445.8888 • Fax: 415.445.8886 www.ccareynkf.com
SAN FRANCISCO • OFFICE • FIRST QUARTER
TABLE OF CONTENTS Coverage Map 1
Office Update and Q1 2011 in Review 2
Office Market Highlights - Leasing 3
Office Market Highlights - Sales 5
San Francisco Class “A” Focus 6
North Financial District Market Summary 8
South Financial District Market Summary 10
North Waterfront / Jackson Square Market Summary 12
Van Ness / Civic Center Market Summary 13
Union Square Market Summary 14
SoMa Market Summary 15
Agent Roster 19
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SAN FRANCISCO • OFFICE • FIRST QUARTER
COVERAGE MAP
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SAN FRANCISCO OFICE •FIRST QUARTER
SAN FRANCISCO • OFFICE • FIRST QUARTER
OFFICE UPDATE AND Q1 2011 IN REVIEW
Driven by the organic expansion of technology based industries, San Francisco’s economy appears to be in recovery mode. In a matter of 12 months the local unemployment rate has dropped from 10.1 percent to 9.5% (according to January figures). Furthermore, corporate confidence has led to increased spending on information technology, which has in-turn positively affected the majority of local business sectors. The financial service and professional service sectors have also begun to thaw, filling holes leftover from the economic downturn.
The San Francisco office market as a whole has benefited from local economic stabilization, recording 327,701 square feet of positive net absorption through Q1-‘11. The overall office vacancy rate fell from 14.2% to 13.6% quarter-over-quarter. This increase in occupancy has in turn begun to push CBD Class A asking rents up to $38.21/rsf fully serviced (compared to $37.49/rsf fully serviced in Q4-’10). Leasing activity in the first quarter was once again led by technology companies. Salesforce.com expanded by 55,977 square feet at 123 Mission Street, Idle Games leased 33,252 square feet at 875 Howard Street, InqMobile leased 10,925 square feet at 139 Townsend Street and Aptimus renewed and expanded its sublease from AON at 199 Fremont Street for a total of 51,429 square feet. As mentioned, leasing velocity from San Francisco financial and legal firms has begun to
re-emerge; with Sedgwick, Detert, Moran, & Arnold leasing nearly 90,000 square feet at 333 Bush Street and Mellon Bank committing to 32,000 square feet at 100 Pine Street. Due to this increase in leasing activity many landlords have begun to pull back on concession packages and increase average asking rates citywide which currently average $38.21/rsf (all building classes). This trend is especially true in the SOMA submarket, where a handful of creative, brick and timber buildings are commanding starting rents in the mid-$40’s fully serviced. Strong demand from new and expanding tech tenants, coupled with diminishing “creative” inventory has placed a premium on creative space, further bifurcating the market between creative and traditional office use. In an attempt to revitalize the Central-Market area, the city of San Francisco recently approved a Mid Market Tax Break designed to alleviate increases to payroll tax for the first six years for companies locating within a specified zone in proximity to the 960-1455 blocks of Market Street. Twitter is reportedly in lease negotiations for over 210,000 square feet at Shorenstein’s 1355 Market Street, located within the tax break zone. This could turn the Central-Market area into the next submarket to welcome the expanding technology sector.
We expect to see continued improvement in office market fundamentals moving forward, aided by future employment gains and a bullish technology sector. Re-emerging professional services firms benefiting from the overall increase in business activity will be in a better position to review future occupancy needs. Look for landlords to continue to push asking rents and limit lease concessions as space options for tenants diminish.
VACANCY ▼
Q1'11 13.54%
Q4'10 14.25%
CLASS A ASKING RENTS ▲
Q1'11 $38.21
Q4'10 $35.69
NET ABSORPTION ▲
Q1'11 ±327,701
TOP LEASES
Sephora
525 Market Street ±110,588
Keker & Van Nest LLP
633 Battery Street ±90,000Sedgwick, Detert, Moran & Arnold LLP333 Bush Street ±89,076
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OFFICE MARKET HIGHLIGHTS – LEASING
2011 2011Submarket Net Rentable Area * Vacancy Total Vacancy ³ Total Availability Class A Class B Class C Q1 Net Absorption ² Y-T-DNorth Financial District 28,530,271 4,027,374 14.12% 18.28% $39.23 $31.04 $24.85 4,394 4,394South Financial District 24,705,411 2,512,589 10.17% 13.17% $38.46 $32.40 $25.76 155,136 155,136North Waterfront/Jackson Sq. 6,559,001 735,109 11.21% 13.43% $33.00 $29.75 $24.25 (6,839) (6,839)Van Ness/Civic Center 6,437,028 1,195,522 18.57% 18.68% $27.95 $24.50 $23.65 63,739 63,739Union Square 5,628,225 484,786 8.61% 13.42% $32.00 $28.65 $25.00 39,692 39,692SoMa** 10,432,871 2,190,407 21.00% 21.00% $40.21 $35.70 $27.45 71,579 71,579San Francisco Office Market 82,292,807 11,145,787 13.54% 16.40% $38.21 $31.43 $26.06 327,701 327,701** SoMa Inventory includes the following markets: South of the Market; Yerba Buena; Multimedia Gulch; Mission Bay; South Beach; Inner Mission & Potrero Hill
Average Asking Rate ¹
Class A Historical Trends
Class A Quarter Total RSF Direct Vacant Sublet Vacant Vacancy Absorption Rental Rates ¹2007/Q1 46,668,376 3,422,734 441,075 8.3% 91,954 $42.02
Q2 46,663,509 3,286,066 487,191 8.1% 92,522 $43.32Q3 46,663,509 3,083,395 355,421 7.4% 240,597 $46.82Q4 46,663,509 2,976,387 352,776 7.1% 154,149 $46.82
2008/Q1 47,322,203 2,754,242 365,733 6.6% 209,188 $46.91Q2 47,595,475 3,243,799 393,792 7.6% (517,616) $46.94Q3 47,595,475 3,448,110 744,607 8.8% (555,126) $44.07Q4 48,151,794 4,587,686 841,335 11.3% (1,236,304) $41.26
2009/Q1 48,219,559 4,968,642 1,122,238 12.6% (661,859) $37.02Q2 48,219,559 5,009,042 1,273,766 13.0% (190,864) $35.49Q3 48,219,559 4,995,774 1,178,876 12.8% 108,158 $34.64Q4 48,337,119 5,439,820 962,606 13.3% (227,776) $34.64
2010/Q1 48,337,137 5,809,095 812,902 13.7% (87,475) $34.78Q2 48,337,137 5,841,640 876,466 13.9% (96,109) $35.02Q3 48,337,137 5,908,685 836,353 14.0% (26,932) $35.64Q4 48,363,449 6,106,107 588,634 13.8% 50,297 $36.69
2011/Q1 48,362,494 5,900,447 514,103 13.3% 206,666 $38.21 CLASS “A” HISTORICAL VACANCY VS. LEASE RATES
1 Rates are quoted as Full service ³ Vacancy is based on vacant square footage 2 Absorption is based on vacant square footage * Includes all classes of office space
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SAN FRANCISCO • OFFICE • FIRST QUARTER
OFFICE MARKET HIGHLIGHTS – LEASING (CONT.)
525 Market Street
BY THE NUMBERS
Sephora renewed and expanded at 525 Market Street for ±110,588 square feet making it the largest lease transaction of the first quarter.
Significant Leases (By Square Footage)
Largest Leases Tenant Lessor (Sublessor) Address Sq. Ft.Sephora ( E ) ( R ) NY State Teachers Retirement System 525 Market Street 110,588
Keker & Van Nest, LLP ( R ) Brannan Street Investors 633 Battery Stret 90,000
Sedgwick, Detert, Moran & Arnold LLP Brookfield Properties 333 Bush Street 89,076
Goodby, Silverstein & Partners ( R ) Prime Holdings Inc. 720 California Street 81,065
Williams Sonoma Smith Lucille H Trust 100 North Point Street 60,000
Wells Fargo Insurance Services Shorenstein Company LLC 45 Fremont Street 57,081
Salesforce.com ( C ) ( E ) Sumitomo Corporation of America 123 Mission Street 55,977
Catholic Healthcare West ( R ) McCarthy Cook & Company 185 Berry Street 55,000
Aptimus ( E ) ( S ) ( R ) AON 199 Fremont Street 51,429
CA Department of General Services ( R ) Manulife Financial 575 Market Street 36,324
Idle Games Hudson Pacific Properties 875 Howard Street 33,252
WSP Flack + Kurtz ( C ) ( R ) Ashforth Pacific/GE Pension 405 Howard Street 33,155
Largest Pending LeasesTenant Lessor (Sublessor) Address Sq. Ft.Twitter Shorenstein Company LLC 1355 Market Street 210,000Hellman Freedman, Farallon Capital, Pisces, Offit Capital ( R ) Morgan Stanley One Maritime Plaza 175,000
Farella, Braun + Martel, LLP ( R ) Shorenstein Company LLC 235 Montgomery Street 122,000
Zynga ( E ) TMG Partners 650 Townsend Street 80,000
Moss Adams Hines 101 2nd Street 30,000
Q1 2011 Top Contiguous Spaces (vacant/ available in the next 12 months)Address Lessor (Sublessor) Sq. Ft.100 Van Ness Avenue National Electric Benefits Foundation 597,443
1355 Market Street Shorenstein Company LLC 518,232
888 Brannan Street Wells Fargo 400,254
680 Folsom Street TMG/ Rockwood Capital 400,000370 Third Street Lincoln/Lane Partners 367,027
500 Terry Francois Blvd. Sobrato Development 278,512
50 Fremont Street TIAA-CREF 257,696
( S ) = Sublease ( R ) = Renewal ( E ) = Expansion ( C ) = Cornish & Carey Commercial Newmark Knight Frank Involvement
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OFFICE MARKET HIGHLIGHTS- SALES (CONT.)
BY THE NUMBERS
Shorenstein Company LLC purchased 1355 Market Street & 875 Stevenson Street (±1,105,000 square feet total) from the ADCO Group, the largest purchase of the first quarter.
1355 Market Street
Significant Sale Statistics (By Square Footage)
Largest Buildings Sales (By Square Footage)Building Seller Buyer Sq. Ft.1355 Market Street & 875 Stevenson Street ADCO Group Shorenstein Company LLC 1,105,000
Waterfront Plaza (1700-1800 Montgomery Street) Lincoln Property Co LaSalle Investment Management 297,260
500 Terry Francois Blvd. Lionstone Sobrato Development 278,512
550 Kearny Street * Lender Highridge Partners 196,630
530 Bush Street STG Group HCV Pacific Partners 104,000
250 Brannan Street Broe Cos Kilroy Realty 90,348
200 California Street ( C ) Trophy Properties LLC Manchester Capital Management LLC 23,588
Largest Buildings for Sale (Over 50,000 Square Feet)Building Seller Buyer Sq. Ft.409 & 499 Illinois Street Shorenstein Company LLC N/A 453,256
888 Brannan Street (Pending) Wells Fargo SKS Investments (Rumored) 400,254
301 Howard Street* Lender Embarcadero Capital Partners 306,603
1155 Market Street (Pending) Metcalf Family Trust Unidentified 140,781
350 Rhode Island (Pending) Paladin Realty w/ CalSTRS Tishman Speyer (Rumored) 135,000
250 Montgomery Street (Pending) Argonaut Private Equity Unidentified 116,078
600 Townsend (East) Street LBA Realty N/A 82,792
543 Howard Street Gordon Development N/A 75,000
10 United Nations Plaza Hill Companies LLC N/A 72,031
670 5th Street ( C ) Metrovation & Terranomics Development, LLP N/A 72,000
642 Harrison Street 642 Harrison/Hawthorne LLC N/A 59,169
Projects Planned (By Square Footage)Building Owner Location Status Sq. Ft.222 Second Street Tishman Speyer SFD Planning 700,000
350 Bush Street & 500 Pine Street Lincoln Properties NFD Entitled/ On Hold 400,000
680 Folsom Street TMG/ Rockwood Capital SFD Planning 400,000
535 Mission Street Beacon Capital Partners SFD Entitled 307,000
350 Mission Street ( C ) GLL Real Estate Partners SFD Entitled / Marketing Space 300,000
Piers 27-31 Shorenstein Company LLC North Waterfront Planning 300,000
Foundry Square III Wilson Meany Sullivan SFD Entitled 278,710 * = Note Sale ( C ) = Cornish & Carey Commercial Newmark Knight Frank Involvement
888 Brannan Street’s RBA is based on entitlements acquired in 2010 to rezone the property.
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SAN FRANCISCO OFICE •FIRST QUARTER
SAN FRANCISCO • OFFICE • FIRST QUARTER
SAN FRANCISCO CLASS “A” FOCUS – TIER 1, 2 & 3
Energy Star LEED – Certified LEED - Pending
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SAN FRANCISCO OFICE •FIRST QUARTER
SAN FRANCISCO • OFFICE • FIRST QUARTER
S A N F R A N C IS C O C L A S S “ A ” FOCUS – TIER 1, 2 & 3
Energy Star LEED – Certified LEED - Pending
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SAN FRANCISCO • OFFICE • FIRST QUARTER
NORTH FINANCIAL DISTRICT MARKET SUMMARY 1st Quarter, 2011
Building Class Total RSF Overall Direct Sublet Overall Direct Sublet Current Quarter Q4 '10 Rental Rates¹A 21,484,328 14.0% 12.6% 1.5% 3,018,341 2,698,792 319,549 64,319 111,598 $39.23B 6,272,073 15.3% 14.9% 0.4% 960,940 937,351 23,589 (62,991) 28,672 $31.04C 773,870 6.2% 5.7% 0.5% 48,093 44,093 4,000 3,066 16,289 $24.85
28,530,271 14.12% 12.90% 1.22% 4,027,374 3,680,236 347,138 4,394 156,559
Vacancy Rate Vacant (SF) Net Absorption
Historical Trends
Class A Quarter Total RSF Direct Vacant Sublet Vacant Vacancy Absorption Rental Rates2007/Q1 20,968,597 1,703,435 202,698 9.0% (3,396) $37.60
Q2 20,968,597 1,654,847 268,598 9.1% (121,277) $43.24Q3 20,968,597 1,381,444 181,956 9.2% (17,312) $45.15Q4 20,968,597 1,252,588 177,665 7.5% 83,823 $48.30
2008/Q1 21,482,945 1,294,006 131,722 6.6% 55,817 $48.30Q2 21,482,945 1,430,829 153,364 7.4% (134,611) $48.30Q3 21,482,945 1,525,829 477,404 9.3% (286,019) $45.30Q4 21,482,945 2,075,292 563,406 12.3% (480,054) $42.20
2009/Q1 21,546,720 2,189,346 733,855 13.6% (254,346) $37.98Q2 21,546,720 2,215,344 844,216 14.2% (136,359) $36.30Q3 21,546,720 2,320,104 787,246 14.4% (47,790) $35.40Q4 21,546,720 2,437,999 677,910 14.5% (8,559) $35.40
2010/Q1 21,484,328 2,460,520 594,145 14.2% 61,244 $35.68Q2 21,484,328 2,496,782 592,519 14.4% (34,636) $35.89Q3 21,484,328 2,623,061 571,197 14.9% (104,957) $36.01Q4 21,484,328 2,701,790 380,870 14.3% 111,598 $37.45
2011/Q1 21,484,328 2,698,792 319,549 14.0% 64,319 $39.23 CLASS “A” HISTORICAL VACANCY VS. LEASE RATES
1 Rates are quoted as full service
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SAN FRANCISCO • OFFICE • FIRST QUARTER
NORTH FINANCIAL DISTRICT MARKET SUMMARY
BY THE NUMBERS
Sedgwick, Detert, Moran & Arnold LLP leased ±89,076 square feet deal at 333 Bush Street.
14.12% overall vacancy in Q1’11, compared to 14.11% in Q4’10.
±4,394 square feet of absorption in Q1’11, compared to ±156,559 square feet of positive absorption in Q4’10.
CLASS “A” HISTORICAL DIRECT VS. SUBLEASE AVAILABLE SPACE
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SAN FRANCISCO • OFFICE • FIRST QUARTER
SOUTH FINANCIAL DISTRICT MARKET SUMMARY
Building Class Total RSF Overall Direct Sublet Overall Direct Sublet Current Quarter Q4 '10 Rental Rates¹A 20,239,092 10.4% 9.4% 1.0% 2,097,330 1,902,776 194,554 173,634 531 $38.46B 3,244,087 7.3% 7.2% 0.1% 237,683 234,404 3,279 (5,476) (12,596) $32.40C 1,222,232 14.5% 14.2% 0.3% 177,576 173,544 4,032 (13,022) (9,041) $25.76
24,705,411 10.17% 9.35% 0.82% 2,512,589 2,310,724 201,865 155,136 (21,106)
Vacancy Rate Vacant (SF) Net Absorption Quarter, 2011
Historical Trends
Class A Quarter Total RSF Direct Vacant Sublet Vacant Vacancy Absorption Rental Rates2007/Q1 19,128,276 991,788 160,721 6.0% 252,536 $37.10
Q2 19,128,276 998,881 142,012 6.0% 13,586 $42.67Q3 19,128,276 1,157,348 92,021 6.5% 114,922 $43.40Q4 19,128,276 1,294,077 83,682 7.2% (128,390) $47.60
2008/Q1 19,612,763 1,064,770 149,049 6.2% (32,660) $47.60Q2 19,612,763 1,153,898 158,734 6.7% 37,426 $47.60Q3 19,612,763 1,357,040 187,752 7.9% (73,457) $47.60Q4 20,169,082 1,977,938 203,342 10.8% (410,583) $44.20
2009/Q1 20,181,060 2,089,038 284,973 11.8% (237,133) $41.50Q2 20,181,060 2,086,629 297,292 11.8% (9,910) $37.35Q3 20,181,060 1,990,618 248,285 11.1% 145,018 $36.20Q4 20,181,060 1,966,796 191,732 10.7% 80,375 $35.30
2010/Q1 20,239,092 2,099,081 166,408 11.2% (106,961) $35.30Q2 20,239,092 2,103,286 240,025 11.6% (77,822) $35.30Q3 20,239,092 2,022,986 248,509 11.2% 71,816 $35.78Q4 20,239,092 2,064,200 206,764 11.2% 531 $37.53
2011/Q1 20,239,092 1,902,776 194,554 10.4% 173,634 $38.46 CLASS “A” HISTORICAL VACANCY VS. LEASE RATES
1 Rates are quoted as full service
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SAN FRANCISCO OFICE •FIRST QUARTER
SAN FRANCISCO • OFFICE • FIRST QUARTER
SOUTH FINANCIAL DISTRICT MARKET SUMMARY
BY THE NUMBERS
Salesforce.com leased ±55,977 square feet of expansion space at 123 Mission Street.
10.17% overall vacancy in Q1’11, compared to 10.80% in Q4’10. ±155,136 square feet of positive absorption in Q1’11, compared to (±21,106) square feet of negative absorption in Q4’10.
CLASS “A” HISTORICAL DIRECT VS. SUBLEASE AVAILABLE SPACE
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SAN FRANCISCO • OFFICE • FIRST QUARTER
NORTH WATERFRONT/JACKSON SQUARE MARKET SUMMARY
BY THE NUMBERS
Keker & Van Nest, LLP renewed at 633 Battery Street for ±90,000 square feet. 11.21% overall vacancy in Q1’11, compared to 11.10% in Q4’10. (±6,839) square feet of negative absorption in Q1’11, compared to (±68,994) square feet of negative absorption in Q4’10.
1st Quarter, 2011
Building Class Total RSF Overall Direct Sublet Overall Direct Sublet Current Quarter Q4 '10 Rental Rates¹A 1,680,253 17.8% 17.8% 0.0% 298,875 298,875 0 755 (90,194) $33.00B 3,458,047 10.6% 9.0% 1.6% 366,468 310,193 56,275 7,322 (8,896) $29.75C 1,420,701 4.9% 4.1% 0.8% 69,766 57,866 11,900 (14,916) 30,096 $24.25
6,559,001 11.21% 10.17% 1.04% 735,109 666,934 68,175 (6,839) (68,994)
Vacant (SF)Vacancy Rate Net Absorption
CLASS “A” HISTORICAL VACANCY VS. LEASE RATES
1 Rates are Quoted as Full Service
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SAN FRANCISCO OFICE •FIRST QUARTER
SAN FRANCISCO • OFFICE • FIRST QUARTER
VAN NESS/CIVIC CENTER MARKET SUMMARY
BY THE NUMBERS
18.57% overall vacancy in Q1’11, compared to 19.56% in Q4’10.
±63,739 square feet of positive absorption in Q1’11, compared to ±5,045 square feet of positive absorption in Q4’10.
Building Class Total RSF Overall Direct Sublet Overall Direct Sublet Current Quarter Q4 '10 Rental Rates¹A 2,105,547 22.2% 22.2% 0.0% 467,146 467,146 0 5,688 2,586 $27.95B 2,682,719 25.2% 22.3% 2.9% 675,675 597,559 78,116 44,642 (1,383) $24.50C 1,648,762 3.2% 3.2% 0.0% 52,701 52,701 0 13,409 3,842 $23.65
6,437,028 18.57% 17.36% 1.21% 1,195,522 1,117,406 78,116 63,739 5,045
Vacancy Rate Vacant (SF) Net Absorption Quarter, 2011
CLASS “A” HISTORICAL VACANCY VS. LEASE RATES
1 Rates are quoted as full service
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SAN FRANCISCO • OFFICE • FIRST QUARTER
UNION SQUARE MARKET SUMMARY
BY THE NUMBERS
Inkling leased ±10,343 square feet at 153 Kearny Street. 8.61% overall vacancy in Q1’11, compared to 10.62% in Q4’10.
±39,682 square feet of absorption in Q1’11, compared to ±62,069 square feet of absorption in Q4’10.
Building Class Total RSF Overall Direct Sublet Overall Direct Sublet Current Quarter Q4 '10 Rental Rates¹A 294,125 31.6% 31.6% 0.0% 92,824 92,824 0 0 9,664 $32.00B 2,948,792 6.4% 6.3% 0.1% 188,387 185,031 3,356 18,222 13,770 $28.65C 2,385,308 8.5% 8.5% 0.0% 203,575 203,050 525 21,470 38,635 $25.00
5,628,225 8.61% 8.54% 0.07% 484,786 480,905 3,881 39,692 62,069
Vacancy Rate Vacant (SF) Net Absorption Quarter, 2011
CLASS “A” HISTORICAL VACANCY VS. LEASE RATES
1 Rates are quoted as full service
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SECOND QUARTER
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SAN FRANCISCO OFFICE • FIRST QUARTER SOMA OFFICE UPDATE Q1 2011 By: Riccardo Gale
Over the course of the past four quarters, the SOMA market has seen steadily increasing rates and decreasing vacancy. This trend continued with increased vigor this past quarter. Average asking rents across all classes soared to $37.64/rsf up from $30.90/rsf in the previous quarter. This represents a noteworthy 22% increase in average asking rents. Vacancy fell from 23.62% to 21.00%, with tenants absorbing 71,579 rentable square feet of office space. Although the market is much tighter for creative space, this the huge increase in average asking rents. Primarily driving the demand is, of course, the technology sector. There is a great deal of appetite for creative, collaborative space in those submarkets which provide good access to Caltrain and/or BART, including the ball park area, the Mission/Howard street corridor, and the always attractive 2nd Street corridor. Driving the largest percentage of absorption this quarter were early stage start-ups and small users. In fact, only three transactions of over 20,000 rentable square feet were completed, and of those only Idle Games is a technology company. Demand for small, creative suites in the most coveted submarkets has so outstripped supply that
asking rents there have pushed well into the $40’s per rentable square foot, fully serviced. But it’s not just the coveted “brick and timber” space that is driving strong rates anymore. Well located, high-ceiling buildings such as 303 2nd Street, which have some creative appeal and can deliver larger blocks of space for current occupancy or future expansion, are leasing with continued rent increases. Similarly, tenants who have traditionally been located in the heart of SOMA are showing more willingness to stretch their geographic parameters. Twitter’s commitment to the Central-Market is evidence of this trend. Not surprisingly, the pace of investment activity has also increased from previous quarters. Following the sale of 250 Brannan Street for ±$365/rsf to Kilroy Realty, Tishman Speyer is rumored to be in contract to purchase 350 Rhode Island for ±$310/rsf, and Mission Bay’s 500 Terry Francois has been sold by Lionstone to Sobrato Development at an undisclosed price. In addition, LBA Realty recently brought 600 Townsend (East) to the market. In conclusion, the first quarter of 2011 saw rapid increases in rents, particularly for small creative suites in prime locations. Many tenants are accordingly compelled to consider slightly more traditional buildings and fringe locations.
VACANCY ▼
Q1'11 21.00%
Q4'10 23.62%
CLASS A ASKING RENTS ▲
Q1'11 $37.64
Q4'10 $30.90
TOP LEASES
Catholic Healthcare West
185 Berry Street ±55,000
Idle Games
875 Howard Street ±33,252
ABM Industries
600 Harrison Street ±31,179
SUBLEASE SPACE AVAILABLE ▼
Q1'11 ±69,966
Q4'10 ±159,706
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SAN FRANCISCO OFICE •FIRST QUARTER
SAN FRANCISCO • OFFICE • FIRST QUARTER
SOMA MARKET SUMMARY 1st Quarter, 2011
Submarket # of Buildings Total Sq. Ft. Vacant Sq. Ft. Vacancy Rate Average Asking Rent Absorption Sq. Ft.
South Beach 17 2,102,980 183,472 8.72% $40.00 19,363
Multimedia Gulch 42 4,038,181 582,929 14.44% $28.25 39,248
Yerba Buena/South of Market 19 2,628,347 975,673 37.12% $24.05 (22,226)
Potrero Hill / Inner Mission 14 1,099,626 169,821 15.44% $24.90 32,742
Mission Bay 2 563,737 278,512 49.40% $44.00 2,452
Totals: 94 10,432,871 2,190,407 21.00% $36.61 71,579 *Rates are based on a weighted average for available space only. SOMA Top Buildings Q1 2011 Building Stories Building
Sq. Ft. Total¹Rates
Direct Avg. Direct Sq. Ft.
Sublease Sq. Ft.
Total Avail. Sq. Ft. Total Percent Avail.
185 Berry Street 6 939,549 $40.00 208,089 11,189 219,278 23.3%
475 Brannan Street 4 255,000 $42.00 0 0 0 0.0%
444 DeHaro Street 2 152,000 $38.00 110,666 0 110,666 72.8%
303 2nd Street 10 700,945 $36.00 33,878 0 33,878 4.8%
501 2nd Street 7 207,809 $36.00 5,776 0 5,776 2.8%
625 2nd Street 4 134,447 $38.00 0 33,000 33,000 24.5%
123 Townsend Street 6 138,735 $42.00 0 0 0 0.0%
139 Townsend Street 5 57,782 $45.00 10,925 7,105 18,030 31.2%
410 Townsend Street 4 73,755 $35.00 0 0 0 0.0% 1 Rates are Quoted as Full Service Top Contiguous Spaces Available (vacant/available space in the next 12 months) Address Sq. Ft.
680 Folsom Street ±400,000
370 Third Street ±367,027
500 Terry Francois ±278,512
888 Brannan Street ±260,000
499 Illinois - Bldg. 2 ±210,275
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SAN FRANCISCO • OFFICE • FIRST QUARTER
SOMA MARKET SUMMARY (CONT.) T op L eas es Q1 2011
Tenant Address Lessor Square Feet
Catholic Healthcare West ( R ) 185 Berry Street McCarthy Cook & Company ±55,000
Idle Games 875 Howard Street Hudson Pacific Properties ±33.252
ABM Industries 600 Harrison Street Pell Development ±31,179
Airbnb.com ( S ) 99 Rhode Island Street Aliph ±20,000
BitTorrent ( C ) 303 2nd Street Kilroy ±17,522 Top Pending Leases Q1 2011 Tenant Address Lessor Square Feet
Zynga ( E ) 650 Townsend Street TMG Partners ±80,000 Top Buildings for Sale Q1 2011 Building Seller Buyer Square Feet
409 & 499 Illinois Street Shorenstein Company LLC N/A ±453,256
888 Brannan Street (Pending) Wells Fargo SKS Investments (Rumored) ±400,254
350 Rhode Island Street (Pending) Paladin Realty w/ CalSTRS Tishman Speyer (Rumored) ±135,000
600 Townsend (East) Street LBA Realty N/A ±82,792
543 Howard Street Gordon Development N/A ±75,000
670 5th Street ( C ) Metrovation & Terranomics Development, LLP N/A ±72,000
642 Harrison Street 642 Harrison/Hawthorne LLC N/A ±59,169
( * ) = Note Sale
( S ) = Sublease ( R ) = Renewal ( E ) = Expansion ( C ) = Cornish & Carey Commercial Newmark Knight Frank Involvement
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SAN FRANCISCO OFICE •FIRST QUARTER
SAN FRANCISCO • OFFICE • FIRST QUARTER
AGENT ROSTER
Roman Adler OFFICE LEASING
415.274.4434 [email protected] Jonathan Allen 415.445.5138 [email protected]
Karl Baldauf 415.445.5117 [email protected]
Bill Benton 415.274.4434 [email protected]
Mike Brown 415.274.4423 [email protected]
John Cashin 415.445.5112 [email protected]
Donnette Clarens 415.445.5120 [email protected]
Bryan Courson 415.445.5155 [email protected]
Nathan Crawford 415.274.4439 [email protected]
Kevin Delehanty 415.445.5132 [email protected]
Shannon Dolan 415.445.5105 [email protected]
Riccardo Gale 415.445.5119 [email protected]
Liz Hart 415.513.2170 [email protected]
Jim Lucas 415.445.5106 [email protected]
John Norton 415.445.5137 [email protected] Bart O’Connor 415.445.5102 [email protected]
Will Scovill 415.445.5134 [email protected]
Nick Slonek 415.445.5100 [email protected]
Cassidy Zerrer 415.274.4432 [email protected] RETAIL LEASING Tracy Chiao 415.445.5140 [email protected]
Erika Elliott 415.445.5124 [email protected]
Tom Neuburger 415.445.5129 [email protected]
Julie Taylor 415.445.5128 [email protected]
INVESTMENTS
Russ Sherman 415.445.5104 [email protected] CAPITAL GROUP Ben Bullock 415.445.5139 [email protected] Erik Doyle 415.445.5111 [email protected]
Sean Fulp 415.445.5123 [email protected]
Allison Gorelick 415.445.5131 [email protected]
Mike Hegseth 415.445.5113 [email protected]
Kyle Ladewig 415.445.5103 [email protected]
Brad Zampa 415.445.5115 [email protected]
Ali Siddiqui 415.445.5170 [email protected]
MARKETING/SALES ASST.
Lauren Collette 415. 274.4436 [email protected]
Natelle Fitzgerald 415.274.4415 [email protected] Kathryn Jackson 415.445.5161 [email protected]
Madeline Kieselhorst 415.445.5114 [email protected]
Raquel Ledesma 415.445.5136 [email protected]
Melinda Miyagishima 415.445.5108 [email protected]
Cynthia Morales 415.445.5149 [email protected]
Rachel Pagan 415.445.5121 [email protected] OFFICE ADMIN.
Nicole Costello 415.274.4436 [email protected] BK Masterson 415.445.8888 [email protected]
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SAN FRANCISCO OFICE •FIRST QUARTER
SAN FRANCISCO • OFFICE • FIRST QUARTER