Sorry for the multiple posts. I forgot I wanted to add
this little tidbit from the Business Times:
Quote:
Move over California Street. San Francisco's priciest office rents are now on once-gritty Mission Street.
Companies renting space in offices on Mission Street are paying the highest rents in San Francisco for the first time. Office towers in the Transbay area are renting at the biggest premium in the city, according to a report by real estate services firm JLL. In past years when JLL surveyed the most expensive streets for office towers, buildings along the North Financial District’s California Street came out on top.
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Office rent on Mission Street – between the Embarcadero and 5th Street – hit $89.58 a square foot annually, 34 percent more than the average commercial street in San Francisco. That’s the highest in San Francisco, but dwarfed by some Bay Area counterparts, like Sand Hill Road in Menlo Park ($141.60 a square foot) and Hamilton Avenue in Palo Alto ($124.44.), and by the iconic Fifth Avenue in New York ($119.27).
It’s clear the price of a Mission Street address has gone up recently, and some of what's driving that is the transportation infrastructure, with the Transbay Transit Center and the Central Subway coming online in the next few years. Tech companies are ponying up to secure a piece of the burgeoning area. Salesforce (NYSE:CRM) leased half of its now-namesake tower for $83 a square foot annually last year.
Mission Street’s rise over California Street underlines the power shift in San Francisco’s office market. Mission Street is becoming a more coveted address than California Street, especially as technology companies like Salesforce, WeWork, Trulia (NYSE:TRLA) and New Relic starting to inhabit the former street’s floors.
But there’s a practical read to the data, too. Simply, Mission Street is home to new offices like Salesforce Tower, 535 Mission and 555 Mission. Meanwhile, the North Financial District and California Street has been mostly built out. New buildings begets higher rents, typically. It's also meant the highest returns for landlords selling or recapitalizing buildings.
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What do you guys think? Is it access to transportation? Is it due to "hotness". Or simply a function of newer buildings?
Personally, I would guess it's mostly the newness plus access to transportation. There is a flood of commuters coming in from the Peninsula, so being closer to CalTrain must be appealing (both sides of Market have equal access to BART and ferries).