[BTinSF]

San Francisco Sizzle
May 30, 2007; Page B6

With technology making a comeback, both San Francisco and the Silicon Valley office markets are finally in recovery, with rising rents and decreasing space. For example, Silicon Valley's vacancy rate is 12.4%, down from a high of 27.2% at the end of 2002 when the tech bust hit the market the hardest.

And as industry experts have seen in other cities including Boston and New York, tenants in San Francisco are willing to pay top dollar for fabulous views. Asking rental rates for a "full view," defined as panoramic views of the Bay and Golden Gate bridges, is averaging close to $80 per square foot in the best-quality office buildings -- a rate not seen since the height of the tech boom, says Maria Sicola, executive managing director of research for Cushman & Wakefield.

One trend affecting those markets: Some traditional Silicon Valley employers have been looking for space in San Francisco because they have found their younger work force prefers an urban environment to the sprawling tech campuses. Google Inc., based in Mountain View, Calif., already subleased space at San Francisco's Hills Plaza from Gap Inc.

Source: http://online.wsj.com/article_print/...870618102.html