san francisco center for economic development

April 2014

Commercial Real Estate

  • The San Francisco office market continues to attract new and expanding companies. By 2015, 2.4 million square feet of new construction and renovated space, especially in SoMa, are expected. 40 percent of this space is preleased.
  • Vacancy rates increased by 0.2 percent for class A CBD space, from 8.9 percent to 9.1 percent in the first quarter.
  • Rental rates increased 5 percent from the beginning of 2013 and as the San Francisco market continues to be active, rates should keep increasing throughout the year.
  • San Francisco continues to have one of the strongest real estate markets in the U.S. with more than 6 million square feet of demand being tracked. Six lease transactions larger than 100,000 square foot were completed in Q1 2014. Of those transactions, five represented expansions, led by tech-giants Twitter and Dropbox for a total of more than 800,000 square feet.
  • Leasing activity totalled 1.9 million square feet, the third-highest level for a first quarter in 10 years.
  • In spite of a modest first quarter, office building sales are projected to improve over the course of 2014 as investors look to capitalize on increasing values.

San Francisco Office Lease and Vacancy Rates

Source: Cushman & Wakefield

Home Sales in San Francisco and the Bay Area Counties

  • San Francisco’s median home price remains the highest in the Bay Area, at $937,500 in March of 2014. Solano, which experienced a 30.4 percent increase, remains the lowest at $300,000.
  • A total of 6,308 new and resale houses and condos sold in the nine-county Bay Area last month. This was the lowest number of homes sold for any March since 2008.
  • The number of Bay Area homes that sold for less than $500,000 in March dropped by 32.9 percent, while the number that sold for more increased by 5.2 percent.
  • “A number of factors can keep a lid on sales. Affordability, for example. Or hard-to-get mortgages. These factors certainly play a role today, but clearly the main challenge is an inadequate supply of homes for sale,” according to DataQuick.

Bay Area Home Sales: Volume and Median Price

Source: DataQuick


  • San Francisco’s unemployment decreased to 5.2 percent in March, dropping from 26,100 unemployed in January to 25,700 in February. San Francisco’s unemployment rate remains the third lowest among California’s 58 counties.
  • Marin, San Mateo and San Francisco continue to have the lowest unemployment rates in the state.
  • At the national level, the unemployment rate increased by 0.2 percent, from 6.6 percent in January to 6.8 percent in February. The overall unemployment rate in California is 8.4 percent.
  • San Francisco has been ranked 2nd behind Riverside, California in job growth from 2012 to 2013 by the Bureau of Labor Statistics. While the U.S. job growth rate remains at 1.7 percent the San Francisco job growth reached 3.9 percent. State figures indicate that San Francisco experienced 57 percent growth in tech jobs between 2010 and 2013, beating Silicon Valley in tech job growth.

Bay Area Unemployment Rate by County

Source: CAL-EDD

Unemployment Trend Comparison

Source: CAL-EDD

San Francisco, a "Digital City"

According to The Boston Consulting Group:

  • The concentration of engineering talent in San Francisco is one of the highest in the world, totaling more than 50,000 engineers.
  • 17 tech companies in the Bay Area are valued at $1 billion or more.
  • 79 tech companies in the Bay Area are valued higher than $100 million. An additional 17 tech companies became public through IPOs in 2013.
  • 73 percent of those surveyed believe that technology companies are good for San Francisco, and 60 percent feel that technology workers are good for San Francisco.

Source: The Boston Consulting Group, “Building a Digital City – Challenges, Opportunities, and Lessons from San Francisco"

Venture Capital 1st Quarter 2014

  • San Francisco ranked number one in the world for early stage venture funding.
  • The San Francisco Bay Area continues to receive the largest share of venture capital funding.
  • In the first quarter of 2014, 49.62 percent of all venture capital funding in the U.S. was in the San Francisco Bay Area, and 86 percent of all venture capital invested in California was in the San Francisco Bay Area.
  • With 321 deals contracted in Q1, Bay Area companies received $4.7 billion of venture capital funding.
  • A resurgence in Bay Area software investing (152 rounds totaling $3.3 billion in Q1) helped increase overall deal flow in the region. It is the biggest quarterly total ever raised.

Source: PricewaterhouseCoopers


  • San Francisco International Airport has been named “Best Airport” by Outside Magazine’s 2014 Travel Awards for the renovation of Terminal 3. The renovation was facilitated through a design-build partnership between Hensel Phelps, Gensler and the KPA Group.
  • Ireland-based Aer Lingus is now running five direct flights per week from San Francisco to Dublin.
  • United Airlines is now running seven direct flights per week between San Francisco and Taipei, and has added a non-stop daily flight between San Francisco and Paris (CDG).
  • China Eastern Airlines is commencing non-stop service from SFO to Shanghai (PVG).

Source: San Francisco International Airport: (Update Winter 2013)

San Francisco Ranked 2nd Most Dense City in the U.S.

A new study by Smart Growth America has ranked San Francisco as the second-densest metropolitan area in the country behind New York City.

Source: Smart Growth America, Measuring Sprawl 2014

San Francisco Nears Top for Pay Increases

San Francisco was the nation’s third best city for pay raises in the first quarter of 2014, Seattle-based PayScale reported. While nationwide pay is up 0.5 percent from a year earlier, San Francisco’s is up 1.5 percent, surpassing New York City (up 1.2 percent) and just behind Seattle and Minneapolis, up 1.6 percent and 1.9 percent, respectively.

Source: PayScale Report

San Francisco Ranked 2nd Most Innovative City in the Last Decade

According to a new ranking based on the number of utility patents* received by each metropolitan area between 2000 and 2011, San Francisco ranks 2nd, just behind New York City, with 54,205 filed utility patents.

Many patents belong to the high tech category, among them, semiconductors, networking and artificial intelligence fields.

*The most common type of patent in the United States.


New Record-Breaking Amount of Visitor Spending in 2013

In 2013 San Francisco visitors spent more than $9.4 billion in the local hospitality industry. More than 16.9 million people visited the city last year, compared with 16.5 million in 2012.

Source: SF Travel

California’s Exports Regain Momentum

The state’s merchandise export trade totaled $13.76 billion, up 8.3 percent from the $12.70 billion in exports recorded in the same month in 2013. By comparison, overall U.S. merchandise exports increased by just 0.3 percent during the same period.

Mexico remained California’s single largest export market during the first quarter, with total value increasing by 8 percent to $5.8 billion. Exports to Canada rose by 16 percent to $4.54 billion, while shipments to China increased by 23 percent to $4.12 billion.

Source: Beacon Economics

Contact Us:

QuickFacts is produced by the San Francisco Center for Economic Development, a 501(c)(3) non-profit division of the San Francisco Chamber of Commerce Foundation.

For more information please contact:

Dennis Conaghan
Executive Director
+1 415.352.8819

Like us on Facebook and follow us on Twitter to receive daily news and updates from the SFCED.

If you would like to opt out of QuickFacts, please email and request to be removed from our mailing list.