san francisco center for economic development

November - December 2013

Commercial Real Estate

Steady demand from the technology and financial sectors, as well as increasing property values, have kept pressure on both vacancy and rental rates. Citywide, office lease rates increased by 3.5 percent in Q3 2013 to $53.84 per square foot, while vacancy rates decreased from 8.5 percent in Q2 to 8.2 percent in Q3.

Net absorption increased during Q3 2013, from 193,000 square feet to 737,000 square feet, while the total square footage under construction decreased from 2.86 million square feet to 2.3 million square feet.

There are 148 tenants with more than 4 million square feet of office space requirements in San Francisco—between September and October 2013, over half a million square feet of new tenant requirements were registered. Technology companies now make up 35 percent of the tenant requirements in San Francisco.

Sources: Colliers International and CBRE, Inc. Q3 2013

Source: Cushman & Wakefield


Residential real estate markets in California and across the Bay Area continue to show price gains. Meanwhile, increasing demand on the city’s relatively static housing supply is exerting upward pressure on residential rental rates and lowering vacancy rates. During Q3 2013, the average residential asking rent in San Francisco increased 3.7 percent to $3,096.00— a year-over-year increase of 11.8 percent. Currently, San Francisco‘s apartment vacancy rate is the sixth-lowest in the country at 4.5 percent.

Foreclosures in California have reached their lowest levels since 2006. Across the Bay Area, housing markets have shown strong appreciation, with the median price gaining an average of 29.7 percent between October 2012 and October 2013. Meanwhile, the number of homes in the area selling for less than $500,000 dropped 26.4 percent.

As of October, San Francisco’s median home price remained the highest in the Bay Area at $845,000, up 6.4 percent from last year. Year-over-year, the volume of homes sold in San Francisco has improved by 3.7 percent.

Sources: DataQuick, SF Examiner and


Home Sales in Bay Area Counties

Source: DataQuick

Foreclosure Activity in Bay Area Counties

(Source: DataQuick)


San Francisco’s unemployment rates remained unchanged at 5.3 percent in October. Statewide, unemployment increased slightly in October, to 8.3 percent. San Francisco, Napa, San Mateo and Marin Counties continue to post the lowest unemployment rates in California.

Bay Area Unemployment Rate by County (August - October, Not Seasonally Adjusted)

Source: CAL-EDD (*Preliminary Reporting for October)

Source: CAL-EDD (California and San Francisco), BLS (U.S.)

San Francisco Venture Capital Q3 2013

Of the $7.8 billion venture capital invested in the third quarter in the US, California companies received $4.3 billion, or 55 percent of the total. Of this, $3.6 billion, or 46 percent of all venture capital invested in the US, went to Bay Area companies and $1.4 billion, or 19 percent, to San Francisco companies.

There were 130 deals struck in San Francisco, with six companies receiving more than $50 million. UBER Technologies, Inc. received more than $250 million in funding over the course of the 3rd Quarter of 2013.

Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™

10 Critical Factors Driving the Location Decision

Area Development magazine’s annual survey of business relocation specialists and corporate decision makers identifies the top 10 factors that businesses consider when determining where to locate.

  1. Labor Costs
  2. Highway Access
  3. Skilled Labor Availability
  4. Advanced ICT Services
  5. Occupancy and Construction Costs
  6. Energy Availability and Costs
  7. Corporate Tax Rate
  8. Available Buildings
  9. Tax Exemptions
  10. Low Union Profile

Quickfacts is produced by the San Francisco Center for Economic Development (SFCED).
For more information, please contact:

Dennis Conaghan
Executive Director

Please note our new location and contact number:
235 Montgomery St., 7th Floor, San Francisco, CA 94104
Tel: 415.352-8855

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