Cornish & Carey Q3 Report
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northern california real estate
San francisco
office report
quarterly report Includes SOMA Office Report
370 Third Street JER Partners / Lane Partners Renovation Completed Third Quarter
third QUARTER 2008 San Francisco Office One Bush Street, Suite 400 San Francisco, CA 94104 Tel: 415.445.8888 | Fax: 415.445.8889 www.ccarey.com
Integrity
Knowledge
San francisco
San francisco office third quarter
Table of contents
Page Coverage Map
1
San Francisco Market Overview
2
San Francisco Market Summary
3
San Francisco Market Highlights
4
C&C 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 Office Report
16
Agent Roster
19
Cornish & Carey Commercial San Francisco Quarterly Report is based on a quarterly survey of competitive office buildings. The data included in this report incorporates not only space presently available on the market, but also space which we have been led to believe will come onto the market in the foreseeable future. Information contained herein has been given to us by the owner of the property or other sources we deem reliable. We have no reason to doubt its accuracy, but make no guarantee, warranty or representation about it. All information should be verified prior to lease or purchase.
San francisco
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200
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600
PINE ST
800
BUSH ST
SJT. J. McAU LEY PARk
800
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Mo's Restaurant
1200
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HYDE ST
POLK ST
LARKIN
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# of Buildings: 138 Sq. Ft. 5,887,190 Class A Avg. Rents: $39.70 psf
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400
600
1000
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1000
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JEFFE RSON SQUA RE
ST
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POWELL
1000
NIA ST
CALIFOR
1200
O'FARREL
ST
JACKSON
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# of Buildings: 122 Sq. Ft. 28,816,470 Class A Avg. Rents: $45.30 psf ST
600
TON HUN TING PARK
1400
POST ST
Kokkari
400
BU
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1000
1000
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1000
1200
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1600
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1200
1600
1800
1800
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GRANT
ST
1400
1400
1400
1800
2000
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SACRAM
1400
BUSH ST
200
Jeanty at Jack's
1600
PINE ST
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200
CHIN ESE REC . CTR.
800
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Cafe Roma
POWELL
1600
1800
2000
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1400
1400
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NIA ST
ST
400
Enrico's
ST
CLAY ST
1400
VALLEJO 200
House
ST
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1200
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1600
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1200
PLAY GROU
MASON ST
ST
1600
1600
2000
1400
ST
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# of Buildings: 194 Sq. Ft. 6,769,219 Class A Avg. Rents: $37.20 psf
GOLDEN
PACIFIC
ST
JACKSON
1400
HAYWARD
TAYLOR
1800
1800
2000
2200
2200
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CALIFOR
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PACIFIC
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1600
ST
VALLEJO
1400
SACRAM
1600
Calzones
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CLAY ST
1800
GREEN ST
UNION ST
200
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1800
Jianna
BUPistol S ST
ST
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1800
1400
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1600
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400
TON
GREEN ST
1000
ST
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JONES ST
1200
UNION ST
SANSOM
1800
Mama's Washington Square
LEVI' S PLAZ A
LEVI' S PLAZ A
FILBERT ST WAS HING SQUA RE
1800
2000 1000
ORTH ST LEAVENW
HYDE ST
400
LARKIN
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2200
ST
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2400
POLK ST
VAN NESS
FRANKL
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1600
2000
2000
2400
1200
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PION EER PARK
1600
2200
2200
2200
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2400
2600
ST1 4 UNION
1600
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400
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# of Buildings: 217 Sq. Ft. 6,886,774 Class A Avg. Rents: $42.20 psf
1800
0
2600
2800
ST
FILBERT
MERY ST
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BEAC H NORT H ND PLAY GROU
2000
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1200 1000
MONTGO
2800
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D ST LOMBAR
200
400
600
1400
WHITING
BARD ST
600 00
8 D ST
ST
200
NORTH WATERFRONT / JACKSON SQUARE 1800
2000
2600
UT ST
LOMBAR
SC
Houston's
ST
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CHESTN
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800
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KEARNY
0
ST
2000
2200
2400
3000
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Tan's Cafe
ST FRANCISCO
400
Albona Ristorante
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Trader Joe’s
ST
2000
Caesar's
600
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MARB LE ALIC E COU RT TENN IS
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BAY ST
400
1000
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ST
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NORTH POIN
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200
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THE EMBARCARD
coverage map
San francisco office third quarter
EL DORADO ST
4
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
OFFICE UPDATE AND Q3 2008 IN REVIEW By Dave Karol, Senior Financial Analyst & Sales Associate This third quarter was one of the most tumultuous quarters in recent history. Headline after headline of the crisis in the financial markets spilled over into all sectors of the economy. While San Francisco’s tenancy is more diverse than that of New York, the fallout of Wall Street is still felt here. Here is a brief summary of San Francisco’s exposure to the turmoil in the market: Lehman Brothers – Was the first investment bank to file for bankruptcy since 1990, and based on assets it is the largest bankruptcy in American history. Relative to Lehman’s 1.1 Million Square foot headquarters in New York, their space in San Francisco is minimal: • 555 California – 60,766 sq. ft. on floors 30 & 41. The lease expires in September, 2011. AIG – Received an $85 Billion bailout from the federal government to prevent bankruptcy. In return the government received 100,000 convertible stock shares that equate to a 79.9% equity stake in the company. AIG signed a renewal and expansion of their space in 2007: • Rincon Center (101 & 121 Spear Street) – 190,152 sq. ft. (42% of the property). The lease expires in July, 2017. AIG recently put $10.8M into their space as part of their renewal. Work to be completed in March, 2009. When the work is completed 23,395 sq. ft. of temporary space will be given back. • 50 California – 4,443 sq. ft. on the 33rd floor. Lease expires June, 2009. • 555 California – 10,271 sq. ft. on the 31st floor. Lease expires July, 2010. Washington Mutual (WaMu) – With over $300 Billion in assets, made headlines as the biggest bank failure in U.S. history. They saw a “run on the bank” resulting in customer withdraws of $16.7 Billion in the 10 days following Lehman’s bankruptcy. The Seattle-based company was seized by federal regulators who, in the interest of protecting depositors’’ savings, sold the company’s banking assets to JP Morgan Chase for almost $2 Billion. • 123 Mission – 105,543 sq. ft. (32% of the property) on Floors 4-9, 19 & 27. The lease expires December, 2010 excluding the 27th floor which expires June, 2012. • 201 Mission – 62,591 sq. ft. (13% of the property) on floors 7 & 10-12. The lease
expires November, 2010. The space houses WaMu Card Services. Merrill Lynch – After being battered by the housing crisis and seeing their stock drop 78% in 12 months, Merrill Lynch was able to dodge a complete failure by opting for a $50 billion stock buy-out by Bank of America. Merrill Lynch leases over 275,000 sq. ft in the city: • 101 California 184,434 sq. ft. (65,000 subleased) on floors 9, 11-14, 19-21, 24 & 25. The lease expires October 2012 • 600 California – 47,789 sq. ft. on floors 7, 8 & 15 through October, 2014. • 220 Montgomery – 15,410 sq. ft. on the 6th floor through January, 2011. First Republic – Having been acquired by Merrill Lynch in 2007 for $1.8 billion, their future has now been put into question due to the sale of their parent company. There are several possibilities: B of A may roll up some or all of First Republic’s operations, they might leave the bank untouched, and it’s reportedly possible that First Republic may purchase itself back from B of A and return to independent banking. First Republic is headquartered in San Francisco: • 111 Pine – 113,777 sq. ft. (15,107 sq. ft. is retail space) on floors 1-9. • 388 Market (1 Pine) – 83,000 sq. ft. on floors 2-5, 11&12.
Leasing After an upward trend lasting over 4 years, rental rates are beginning to show signs of slippage. Class “A” asking rates have dropped to an average of $44.07, a decline of 6% from last quarter. Some submarkets have been more resilient than others. SOMA, which has historically been favored by creative companies as opposed to financial services, saw no drop in average asking rates. For landlords with premier view and creative spaces, premium rental rates can still be achieved. Some owners have already reassessed their pro-forma and backed down from their ambitious underwriting. In this market, the only tenants making decisions are those who have expiring leases or are in need of expansion space. For those who still have some term left and were considering signing an early renewal, the general attitude in the market has been to “wait and see”.
Wachovia – Currently Citigroup and Wells Fargo are competing to purchase all, or a portion of, the company. • 4 Embarcadero Center – 63,000 sq. ft. (21,000 subleased) on floors 7-9. The lease expires October, 2010. • 555 California – 30,087 sq. ft. on the 23rd floor. The lease expires January, 2015. Heller Ehrman LLP - After failing to find a Merger and Acquisition partner the 119year old firm is in dissolution mode. • 333 Bush – 251,300 sq. ft. on floors 7-11 & 26-34. The lease expires June, 2018. Development In July you could hear the pylons being pounded into the ground at 535 Mission. It is the first new office project to break ground in the financial district since 555 Mission began construction in 2006. The 293,750 square foot building is scheduled for completion in 2010. The developer, Beacon Capital Partners, is seeking LEED certification for Core & Shell.
2
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
OFFICE MARKET SUMMARY 3rd Quarter, 2008 Submarket North Financial District South Financial District North Waterfront/Jackson Sq. Van Ness/Civic Center Union Square SoMa** San Francisco Office Market
Net Rentable Area * 28,816,470 24,146,886 6,886,774 6,769,219 5,887,190 10,630,651 83,137,190
Availability 3,608,916 2,512,679 645,664 614,377 525,054 2,112,764 10,019,454
Total Vacancy 3 9.67% 7.40% 7.07% 7.26% 8.21% 19.87% 9.80%
Total Availability 12.52% 10.41% 9.38% 9.08% 8.92% 19.87% 12.05%
Average Asking Rate 1 Class A Class B Class C Q3 Net Absorption 2 $45.30 $37.00 $30.00 (290,850) $44.20 $37.00 $29.00 (165,582) $42.40 $36.50 $29.00 (75,596) $37.20 $32.00 $30.00 (35,366) $39.70 $36.00 $30.00 (32,961) $39.79 $35.87 $29.67 (261,908)*** $44.07 $36.00 $29.67 (862,263)***
** SoMa Inventory includes the following markets: South of the Market; Yerba Buena; Multimedia Gulch; Mission Bay; South Beach; Inner Mission & Potrero Hill
*** 390,000 square feet at 370 Third Street were added to SOMA inventory Q3 2008
Historical Trends Class A
Quarter 2004/Q3 Q4 2005/Q1 Q2 Q3 Q4 2006/Q1 Q2 Q3 Q4 2007/Q1 Q2 Q3 Q4 2008/Q1 Q2 Q3
Total RSF 43,979,849 44,284,268 44,430,772 45,526,350 45,134,630 44,794,249 45,181,682 45,265,952 45,267,770 45,278,227 46,668,376 46,663,509 46,663,509 46,663,509 47,322,203 47,595,475 47,595,475
Direct Vacant 5,565,317 5,544,641 5,828,447 5,773,841 4,934,788 4,644,515 3,802,372 3,899,723 3,412,272 3,224,700 3,422,734 3,286,066 3,083,395 2,976,387 2,754,242 3,243,799 3,448,110
Sublet Vacant 1,890,183 1,781,343 1,131,954 1,130,434 1,408,976 1,246,239 717,040 692,683 583,281 643,023 441,075 487,191 355,421 352,776 365,733 393,792 744,607
Vacancy 17.0% 16.5% 15.7% 15.2% 14.1% 13.2% 10.0% 10.1% 8.8% 8.5% 8.3% 8.1% 7.4% 7.1% 6.6% 7.7% 8.8%
Absorption 354,905 129,516 365,583 60,241 464,534 303,271 283,495 111,350 213,537 210,841 91,954 92,522 240,597 154,149 28,808 (325,481) (253,332)
Rental Rates 1 $28.60 $28.60 $29.70 $31.57 $32.56 $33.40 $33.46 $35.27 $35.88 $36.80 $42.02 $43.32 $46.82 $46.82 $46.91 $46.94 $44.07
HISTORICAL VACANCY VS. LEASE RATES
1
Rates are Quoted as Full Service Absorption is based on available square footage and may vary from Vacancy 0 – 3% 3 Vacancy is based on vacant square footage * Includes all Classes of Office Space 2
3
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
OFFICE MARKET HIGHLIGHTS - LEASING BY THE NUMBERS
±105,000 Square feet of space was taken by Pfizer, Inc. at 455 Mission Bay Boulevard. Pfizer’s subsidiary, Rinat Neuroscience out of South San Francisco, will occupy the entire South Wing of 455 Mission Bay Boulevard when the project is completed in January, 2010. Pfizer also has an option on 50,000 square feet in the adjacent building (the East Wing). They signed a fifteen year lease. 455 Mission Bay Boulevard Significant Leases (By Square Foot) Top 5 Leases Tenant Pfizer, Inc. Squire, Sanders & Dempsey LLP Arup ( S ) Carroll Burdick & McDonough ( R ) Symantec ( R ) ( E )
Lessor (Sublessor) Alexandria Real Estate TIAA-CREF JP Morgan Chase State Teachers Retirement System of Ohio Kennedy & Associates
Address 455 Mission Bay Boulevard 275 Battery Street 560 Mission Street 44 Montgomery Street 303 2nd Street
Sq. Ft. 105,000 67,000 49,726 49,528 44,963
Pending Leases Tenant Autodesk Lieff Cabraser Heimann & Bernstein LLP ( R ) OpenTable.com Norcal Waste Systems, Inc. ( R )
Lessor (Sublessor) Glenborough Realty Trust, Inc. TIAA-CREF CFRI Market Street, LLC Arden Realty
Address 60 Spear Street 275 Battery Street 799 Market Street Golden Gateway Commons
Sq. Ft. 116,321 46,000 35,000 25,000
Top 5 Contiguous Spaces (available in 12 months) Address 1355 Market Street (Connects w/ 875 Stevenson) 370 Third Street 555 Mission Street (Under Construction) 650 Townsend Street 500 Terry Francois Blvd.
Lessor (Sublessor) The Adco Group JER / Lane Partners Tishman Speyer TMG Partners CBRE Investors Strategic Partners
Sq. Ft. 405,000 358,582 319,850 313,376 268,245
R: Renewal E: Expansion S: Sublease
4
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
OFFICE MARKET HIGHLIGHTS - SALES BY THE NUMBERS
±267,446 Square feet of class “B” Union Square space at 760 Market Street has been sold by Westcore Properties of San Diego who owned the building since 2007. The new ownership, Thor Equities, is looking to reposition the building. Best Buy just subleased +30,584 square feet of retail space on the ground floor.
760 Market Street Significant Sales Top Building Sales for Q3 2008 Building 760 Market Street (Phelan Building)
Sq. Ft. 267,446
Top Buildings for Sale Over 50,000 Square Feet Building Sq. Ft. One Montgomery Tower (120 Kearny St) * 777,120 555-575 Market Street (Market Center) 770,044 One Sansome Street 652,463 Rincon Center (101/121 Spear St) 580,850 201 Mission Street 483,582 211 Main Street 373,769 221 Main Street 350,000 400 Howard Street (Froundry Square I) 335,000 601 California Street 253,809 235 Pine Street 207,500 1035 Market Street 98,023 101 Howard Street 83,500
Seller Westcore Properties
Buyer Thor Equities
Class B
Seller Nippon Life (NPI) RREEF Broadway Partners Real Estate Fund III Beacon Capital Partners PruUk (LaSalle Investment Management) The Booth Family The Booth Family Morgan Stanley / Glenborough Lincoln Properties / State of Illinois Alecta RE Seligman Western Enterprises The Booth Family
Buyer TBD TBD Mirae Asset MAPS Investment Management TBD TBD TBD TBD TBD TBD TA Realty TBD TBD
Class A A A A A B B A A A B B
Owner Shorenstein Company Tishman Speyer Properties Alexandria Joseph & Maria Fang Beacon Capital Partners RREEF / CalPERS
Location Mission Bay South Financial District Mission Bay North Financial District South Financial District South Financial District
Completion Date Q4-2008 Q4-2008 Q1-2009 Q2 -2009 2010+ 2010+
Owner Tishman Speyer Properties Lincoln Properties GLL Real Estate Partners Shorenstein Company Wilson Meany Sullivan / Stockbridge
Location South Financial District North Financial District South Financial District North Waterfront South Financial District
Status Planning Approved Planning Planning Approved
* Represents a 50% Interest. Includes Crocker Galleria (52,704 square feet of retail space) Projects Under Construction (By Completion Date) Building Sq. Ft. 499/409 Illinois Street * 450,000 555 Mission Street 550,000 1500 Owens Street 157,929 1 Kearny Street ( R ) ( E ) 94,000 535 Mission Street 293,750 680 Folsom Street ( R ) 350,000
Major Tenant(s) Fibrogen DLA Piper / Gibson Dunn None None None None
* 240,000 square feet leased to Fibrogen R: Renovation E: Expansion Projects Planned Building 222 Second Street 350 Bush Street / 500 Pine Street 350 Mission Street Piers 27-31 505 Howard Street (Foundry Sq. III)
Sq. Ft. 617,000 350,000 385,000 300,000 252,500
5
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
C&C FOCUS – TIER 1, 2, & 3
ENERGY STAR
LEED - Certified
LEED - Pending
6
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
C&C FOCUS – TIER 1, 2, & 3
ENERGY STAR
LEED - Certified
LEED - Pending
7
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
NORTH FINANCIAL DISTRICT MARKET SUMMARY 3rd Quarter, 2008
Building Class A B C
Total RSF 21,482,945 6,477,223 856,302 28,816,470
Overall 9.3% 11.3% 6.3% 9.67%
Vacancy Rate Direct 7.1% 10.4% 6.3% 7.83%
Sublet 2.2% 0.8% 0.0% 1.84%
Overall 2,576,484 973,717 58,715 3,608,916
Availability (SF) Direct Sublet 1,959,519 616,965 906,967 66,750 57,762 953 2,924,248 684,668
Net Absorption Current Quarter Q2 '08 Rental Rates1 (286,019) (134,611) $45.30 (9,504) (47,760) $37.00 4,673 626 $30.00 (290,850) (181,745)
Historical Trends Class A
Quarter
Total RSF
Direct Vacant
Sublet Vacant
Vacancy
Absorption
Rental Rates
2004/Q3
19,838,132
2,680,889
777,290
16.5%
(104,547)
$29.90
Q4
19,838,132
2,669,307
535,675
17.4%
(191,053)
$30.60
2005/Q1
19,838,132
2,818,136
449,393
16.2%
253,197
$31.10
Q2
19,819,889
2,828,293
487,826
16.5%
(62,593)
$32.75
Q3
19,805,988
2,365,519
507,236
16.7%
(41,960)
$33.01
Q4
19,817,460
1,922,272
637,961
14.5%
157,926
$34.31
2006/Q1
19,817,460
1,773,127
314,449
12.9%
243,229
$34.75
Q2
19,890,190
1,731,564
337,550
10.5%
108,358
$34.75
Q3
19,895,019
1,557,068
292,971
10.4%
51,837
$36.40
Q4
19,895,019
1,505,161
289,094
9.3%
225,615
$37.00
2007/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)
$43.24
Q3
20,968,597
1,381,444
181,956
9.2%
(17,312)
$45.15
Q4
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
$48.30
Q2
21,482,945
1,430,829
153,364
7.4%
(134,611)
$48.30
Q3
21,482,945
1,525,829
477,404
9.3%
(286,019)
$45.30
HISTORICAL VACANCY VS. LEASE RATES
1 *
Rates are quoted as Full Service The Piers 1.5, 3, 5 were added to North Financial District Class A Q1 2008
8
SAN FRANCISCO
SAN FRANCISCO OFFICE THIRD QUARTER
NORTH FINANCIAL DISTRICT MARKET SUMMARY BY THE NUMBERS
±251,300 Square feet is going to be available at 333 Bush Street as Heller Ehrman LLP closes its doors.
9.3% Class “A” vacancy for the North Financial District submarket, increasing 1.8% since last quarter.
$45.30 Per Square foot (Full Service) for Class “A” space, a decline of 6.21% quarter-over-quarter.
HISTORICAL DIRECT VS. SUBLEASE AVAILABLE SPACE
9
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
SOUTH FINANCIAL DISTRICT MARKET SUMMARY 3rd Quarter, 2008
Building Class A B C
Total RSF 19,612,763 3,311,891 1,222,232 24,146,886
Overall 7.9% 5.7% 4.4% 7.40%
Vacancy Rate Direct 6.9% 5.2% 4.1% 6.54%
Sublet 1.0% 0.5% 0.2% 0.86%
Overall 2,053,514 371,809 87,356 2,512,679
Availability (SF) Direct Sublet 1,761,070 292,444 293,949 77,860 84,533 2,823 2,139,552 373,127
Net Absorption Current Quarter Q2 '08 Rental Rates1 (73,457) 37,426 $44.20 (87,197) 37,338 $37.00 (4,928) 7,266 $29.00 (165,582) 82,030
Historical Trends Class A
Quarter
Total RSF
Direct Vacant
Sublet Vacant
Vacancy
Absorption
2004/Q3
19,687,636
2,353,253
755,277
15.8%
259,685
Rental Rates $29.20
Q4
20,081,418
2,382,289
804,855
15.9%
(78,614)
$30.30
2005/Q1
20,116,732
2,322,185
609,930
14.6%
254,244
$31.10
Q2
20,116,732
2,172,607
603,502
13.8%
217,661
$31.75 $32.53
Q3
20,123,913
1,810,178
562,883
11.8%
112,402
Q4
19,772,060
1,934,028
477,212
12.2%
(38,490)
$33.40
2006/Q1
20,159,493
1,328,836
358,395
8.4%
63,342
$33.40
Q2
19,086,992
1,354,408
325,959
8.8%
41,720
$35.70
Q3
19,094,438
1,271,296
257,646
8.0%
(70,444)
$36.00 $37.10
Q4
19,094,438
1,038,200
262,045
6.8%
228,697
2007/Q1
19,128,276
991,788
160,721
6.0%
252,536
$42.67
Q2
19,128,276
998,881
142,012
6.0%
13,586
$43.40
Q3
19,128,276
1,157,348
92,021
6.5%
114,922
$47.60
Q4
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)
$47.60
Q2
19,612,763
1,153,898
158,734
6.7%
37,426
$47.60
Q3
19,612,763
1,357,040
187,752
7.9%
(73,457)
$44.20
HISTORICAL VACANCY VS. LEASE RATES
1 *
Rates are quoted as Full Service 345 Spear (Hills Plaza) was moved from SOMA to South Financial District Class “A” Q1 2008
10
SAN FRANCISCO
SAN FRANCISCO OFFICE THIRD QUARTER
SOUTH FINANCIAL DISTRICT SUMMARY BY THE NUMBERS
535 Mission Street began construction in July. This 293,750 square foot building is scheduled for completion in 2010. Currently without any signed leases, the property is being built on spec.
50 Beale Street pulled off the market. Offers came in well below Broadway Partners’ desired selling price. Blue Shield occupies 41.7% of the building through December, 2018.
7.4% Overall vacancy and 7.9% Class “A” vacancy for the South Financial District submarket, increasing 1.04% and 1.2% respectively quarter-over-quarter.
HISTORICAL DIRECT VS. SUBLEASE AVAILABLE SPACE
11
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
NORTH WATERFRONT/JACKSON SQUARE MARKET SUMMARY BY THE NUMBERS
+11,306 Square foot early renewal along with a +6,700 square foot expansion signed by SB Architects, Inc. at 1 Beach Street was the largest deal of the quarter in North Waterfront/Jackson Square. SB Architects, Inc. was represented by Jonathan Allen and John Norton of Cornish & Carey Commercial. 11,907 Square feet of positive Class “A” absorption in the North Waterfront / Jackson Square submarket. 7.07% Overall vacancy for the Waterfront / Jackson Square submarket.
Building Class A B C
Total RSF 1,678,713 3,707,546 1,500,515 6,886,774
Overall 5.9% 8.2% 5.5% 7.07%
Vacancy Rate Direct 5.8% 8.1% 5.5% 6.97%
North
Sublet 0.2% 0.1% 0.0% 0.10%
Overall 136,673 418,870 90,121 645,664
Availability (SF) Direct 130,386 382,665 89,321 602,372
Sublet 6,287 36,205 800 43,292
Net Absorption Current Quarter Q2 '08 Rental Rates1 11,907 17,021 $42.40 (56,122) (27,478) $36.50 (31,381) 280 $29.00 (75,596) (10,177)
12
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
VAN NESS/CIVIC CENTER MARKET SUMMARY BY THE NUMBERS
7.26% Overall vacancy for the Van Ness / Civic Center submarket.
4.3% Class “A” vacancy for the Van Ness / Civic Center submarket, making it one of the tightest markets to find Class “A” space in San Francisco.
6,964 Square feet of negative Class “A” absorption in the Van Ness / Civic Center submarket.
Building Class A B C
Total RSF 2,105,547 2,653,592 2,010,080 6,769,219
Overall 4.3% 11.9% 4.3% 7.26%
Vacancy Rate Direct 4.2% 11.8% 4.0% 7.12%
Sublet 0.1% 0.1% 0.3% 0.14%
Overall 108,277 409,370 96,730 614,377
Availability (SF) Direct 106,239 314,206 91,362 511,807
Sublet 2,038 95,164 5,368 102,570
Net Absorption Current Quarter Q2 '08 Rental Rates1 (6,964) 27,254 $37.20 1,192 4,238 $32.00 (29,594) (38,016) $30.00 (35,366) (6,524)
13
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
UNION SQUARE MARKET SUMMARY BY THE NUMBERS
5.0% Class “A” vacancy for the Union Square submarket, unchanged from Q2 2008.
$39.70 Per Square foot (Full Service) for Class “A” space.
32,961 Square feet of negative absorption for all classes of space in the Union Square submarket.
Building Class A B C
Total RSF 181,715 3,037,002 2,668,473 5,887,190
Vacancy Rate Overall Direct 5.0% 5.0% 6.9% 6.6% 10.0% 9.8% 8.21% 7.99%
Sublet 0.0% 0.3% 0.2% 0.22%
Overall 9,075 228,891 287,088 525,054
Availability (SF) Direct 9,075 212,855 263,195 485,125
Sublet 0 16,036 23,893 39,929
Net Absorption Current Quarter Q2 '08 Rental Rates1 0 662 $39.70 (32,611) 64,645 $36.00 (350) (28,661) $30.00 (32,961) 36,646
14
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
THIRD QUARTER
15
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
SOMA MARKET SUMMARY By Riccardo Gale & Marc Trovato In light of current economic conditions, the SOMA market remained fairly strong throughout the third quarter of 2008. Average asking rates held firm at $34.52 and tenants absorbed 128,000 square feet of office space. However, the re-introduction of at 370 Third Street added 390,000 square feet of new supply to the market, resulting in 262,000 square feet of negative net absorption and a modest increase in vacancy to 19.87%. Core SOMA properties continue to command premium rents. For example, Slide leased 36,000 square feet at 301 Brannan in the low $40’s Industrial Gross, and Coverity relocated and expanded at China Basin to 26,000 square feet in the high $40’s per rentable square foot, fully serviced. However, asking rents in non-core properties continue to fall, as landlords react to softening demand for these properties and competition from new sublease availabilities. For example, 539 Bryant completed two leases in the low $30’s, and 642 Harrison is being marketed at that same rate. Availability of high quality, creative, open-plan space remains limited. Some of the more desirable available spaces in the market include:
410 Townsend Street – up to 40,000 RSF (in 10,000 RSF increments) of brick & timber office space 500 Third Street – 8,000 RSF of bright, open, high-ceiling space with downtown views 139 Townsend Street – 11,000 RSF of creative brick and timber, full floor space near the Ballpark
185 Berry Street – 17,500 RSF of quality creative space with waterfront views 72 Townsend Street - 30,000 RSF creative full building lease opportunity with turn-key improvements
(where sublease availability has increased significantly) may continue to push rents lower.
Despite the strong performance of the SOMA market this quarter, concerns loom on the horizon. Significant pending leases are few and far between. Venture capital funding, which is so vital to the growth of the technology sector, is at its lowest level in recent memory. According to Dow Jones VentureSource, the IPO’s and M&A’s of venture-backed companies generated just $4.57 billion this quarter, down 66% from the third quarter of 2007. Tempered demand and increased supply of office space, such as the 190,000 square feet of office space to be reintroduced at 875 Howard Street next quarter, may suppress rental rates in the near future. It is anticipated that some companies will downsize and/or cease operations, adding sublease space to the market and further lowering asking rates on direct space. Tenants who can afford to delay major lease commitments may be well suited to do so. In conclusion, the SOMA office market has remained relatively strong through the third quarter, primarily due to the continued strength of the technology sector. The leasing market has seen robust activity and sustained rent levels, though a lack of access to capital has all but silenced the investments market, with no significant transactions occurring for the second consecutive quarter. General economic conditions will likely temper demand across all sectors, while an increasing supply of direct and sublease space in SOMA and in the central business district
Overall Rent vs. Vacancy 3Q ’07 to 3Q ‘08
16
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
SOMA MARKET SUMMARY 3rd Quarter, 2008 Submarket
# of Buildings
Total Sq. Ft.
Available Sq. Ft.
Vacancy Rate
Average Asking Rent
Absorption Sq. Ft.
South Beach
19
2,241,187
253,637
11.32%
$35.96
71,765
Multimedia Gulch
39
3,964,074
946,510
23.88%
$40.15
12,205
Yerba Buena / South of Market
19
2,591,710
454,042
17.52%
$39.60
(337,479)
Potrero Hill / Inner Mission
13
1,219,132
185,303
15.20%
$32.78
(8,399)
Mission Bay
5
614,548
273,272
44.47%
$55.00
0
Totals:
95
10,630,651
2,112,764
19.87%
$34.52*
(261,908)**
* Excludes 500 Terry Francois & China Basin Landing addition; Rates are based on a weighted average for available space only ** 390,000 square feet at 370 Third Street were added to SOMA inventory Q3 2008
SOMA Top Ten Buildings Stories
Building Sq. ft. Total
1Rates Direct Avg.
Direct Sq. Ft.
Sublease Sq. Ft.
Total Avail. Sq. Ft.
Avail. Total Percent
185 Berry Street
6
939,549
$58.25*
229,441
0
229,441
24.4%
475 Brannan Street
4
255,000
$48.00
0
0
0
0.0%
444 DeHaro Street
2
152,000
$35.00
51,213
0
51,213
33.7%
160 King Street
10
167,983
$46.00
6,300
69,656
75,956
45.2%
350 Rhode Island St. South
4
139,509
$38.00
34,841
0
34,841
25.0%
501 2nd Street
7
207,809
$41.00
9,603
4,992
14,595
7.0%
625 2nd Street
4
134,447
$46.00
0
0
0
0.0%
139 Townsend Street
5
57,782
$42.00
21,341
0
21,341
36.9%
410 Townsend Street
4
80,000
$34.00
39,218
0
39,218
49.0%
650 Townsend Street
6
710,400
$33.00
376,527
16,865
393,392
55.4%
Building
1
Rates are Quoted as Full Service * Rate includes new addition of approximately 175,000 RSF
Largest Contiguous Spaces Address
Square Feet Available
370 3rd Street
358,582
650 Townsend Street
313,376
500 Terry Francois Blvd.
268,245
185 Berry Street
175,000
160 King Street
56,963
303 2nd Street
40,145
410 Townsend Street
39,218
350 Rhode Island Street
34,841
17
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
SOMA MARKET SUMMARY Top Leases Tenant
Lessor
Pfizer, Inc.
Alexandria Real Estate
Square Feet 105,000
Address 455 Mission Bay Boulevard
Symantec ( R ) ( E )
Kennedy & Associates
44,963
303 2nd Street
Nokia ( R )
TMG Partners
39,706
650 Townsend Street
Kennedy Jenks
Kennedy & Associates
38,175
303 2nd Street
Slide
Watson Breevast
35,373
301 Brannan Street
SF Unified School District
Amerimar
35,000
1550 Bryant Street
Comcast
JER / Lane Partners
31,418
370 3rd Street
Coverity ( C ) ( E )
RREEF
26,000
185 Berry Street
Live Nation
251 Rhode Island, LLC
20,142
251 Rhode Island Street
RG/A
Sherman Clay
16,242
35 South Park
Global IP Solutions
642 Harrison & Hawthorne, LLC
12,448
642 Harrison Street
Jaspersoft
PMI
9,779
539 Bryant Street
OPSWAT ( S )
Paul Hockett
8,032
640 2nd Street
Top Pending Leases Tenant
Lessor
OpenTable.com
CFRI Market Street, LLC
Square Feet 35,000
799 Market Street
Address
Undisclosed Tenant ( S )
Macy's.com
16,000
22 4th Street
Undisclosed Tenant
TMG Partners
15,000
650 Townsend Street
Undisclosed Tenant
Apollo Real Estate Advisors
8,300
444 De Haro Street
Top Building Sales *No SOMA Sale Transactions this Quarter.
SOMA Top Picks Location
Floor(s)
Minimum Size
Maximum Size
Asking Rent
Comments
410 Townsend Street
2nd & 3rd
10,000
40,000
$34.00
Creative Brick & Timber with Parking. Nicely finished.
500 3rd Street
Partial 5th
10,200
10,200
$35.00
Great lofty, open concrete ceiling space. Good City view.
139 Townsend Street
2nd
11,000
11,000
$40.00
Creative Brick & Timber full floor. Great location.
185 Berry Street
2nd
17,500
17,500
$45.00
Creative, high ceiling space with Bay views.
Ground
25,000
30,000
$38.00
Very creative full building. Landlord will turn-key improvements.
72 Townsend Street
(E)
= Expansion
(R)
= Renewal
(S)
= Sublease
(C) = Cornish & Carey Involvement
18
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
AGENT ROSTER LEASING Jonathan Allen
INVESTMENTS John Norton
David Karol
415.445.5138 [email protected]
415.445.5137 [email protected]
Karl Baldauf
Bart O’Connor
Michael Leggett
415.445.5117 [email protected]
415.445.5102 [email protected]
415.445.5101 [email protected]
John Cashin
Will Scovill*
Rita Meehan
415.445.5112 [email protected]
415.445.5134 [email protected]
415.445.5135 [email protected]
Donnette Clarens
Nick Slonek
Chris Pawlik
415.445.5120 [email protected]
415.445.5100 [email protected]
415.445.5103 [email protected]
Shannon Dolan
Marc Trovato
Gerry Rohm
415.445.5105 [email protected]
415.445.5118 [email protected]
415.445.5104 [email protected]
Riccardo Gale
415.445.5133 [email protected]
MARKET RESEARCH El Beh 415.445.5114 [email protected]
Jacki Wong
415.445.5119 [email protected]
415.445.5107 [email protected]
Raquel Ledesma 415.445.5136 [email protected]
Sam Liss 415.445.54109 [email protected]
Jim Lucas 415.445.5106 [email protected]
Melinda Miyagishima 415.445.5108 [email protected]
Todd Motoyoshi 415.445.5122 [email protected]
RETAIL LEASING
C&C CAPITAL
OFFICE ADMIN.
Tracy Chiao
Matthew Gum
BK Masterson
415.445.5140 [email protected]
415.445.5116 [email protected]
415.445.5150 [email protected]
Erika Elliott
J.P. Hailer
415.445.5124 [email protected]
415.445.5111 [email protected]
Marissa Miller
Eric Movsessian
415.445.5139 [email protected]
415.445.5123 [email protected]
Rachel Pagan
Brad Zampa
415.445.5121 [email protected]
415.445.5115 [email protected]
Julie Taylor 415.445.5128 [email protected]
* Indicates Life Science Specialist
19
San francisco
office report
quarterly report Includes SOMA Office Report
370 Third Street JER Partners / Lane Partners Renovation Completed Third Quarter
third QUARTER 2008 San Francisco Office One Bush Street, Suite 400 San Francisco, CA 94104 Tel: 415.445.8888 | Fax: 415.445.8889 www.ccarey.com
Integrity
Knowledge
San francisco
San francisco office third quarter
Table of contents
Page Coverage Map
1
San Francisco Market Overview
2
San Francisco Market Summary
3
San Francisco Market Highlights
4
C&C 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 Office Report
16
Agent Roster
19
Cornish & Carey Commercial San Francisco Quarterly Report is based on a quarterly survey of competitive office buildings. The data included in this report incorporates not only space presently available on the market, but also space which we have been led to believe will come onto the market in the foreseeable future. Information contained herein has been given to us by the owner of the property or other sources we deem reliable. We have no reason to doubt its accuracy, but make no guarantee, warranty or representation about it. All information should be verified prior to lease or purchase.
San francisco
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400
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800
800
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200
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400
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200
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1000
800
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1200
600
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200
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600
1200
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200
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40 L ST O'FARREL
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1000
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ST
800
800
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1600
600
ST
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600
400
441 Sutter
J U S T IN H E R MA N P L AZ A
CALIFOR
200
BUSH ST
POST ST
400
600
200
PINE ST
200
1000
Schroeder's
400
ST
SUTTER
600
800
600
400
ST
SUTTER
800
TURK ST
Carnelian Bay Club Room
400 600
BUSH ST
800
EDDY ST
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Taylor's Refresher
Sens Boudin's
ENTO ST
SACRAM
Club One
1000
ELLIS ST
ST. MARY SQUA RE
600
PINE ST
800
BUSH ST
SJT. J. McAU LEY PARk
800
ER ST
Mo's Restaurant
1200
MASON ST
TAYLOR
ORTH ST LEAVENW
ST
IN ST
VAN NESS
HYDE ST
POLK ST
LARKIN
JONES ST
1400
UNION SQUARE 800
00
EDDY ST
McALLIST
ST
1400
NIA ST
Chevy's
Fuzio
McDonald's
NIA ST
CALIFOR
ERO
CLAY ST
Palio D' Asti
CALIFOR
# of Buildings: 138 Sq. Ft. 5,887,190 Class A Avg. Rents: $39.70 psf
1200
L ST
Paninoteca
ENTO ST
1000
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PLAZ A
SACRAM
400
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MARI TIME
Gaylord's
CHIN ESEND PLAY GROU
Pie
The Slanted Door
GTON ST
WASHIN
400
600
1000
PINE ST
1000
ELLIS ST
JEFFE RSON SQUA RE
ST
Empress of China
POWELL
1000
NIA ST
CALIFOR
1200
O'FARREL
ST
JACKSON
200
# of Buildings: 122 Sq. Ft. 28,816,470 Class A Avg. Rents: $45.30 psf ST
600
TON HUN TING PARK
1400
POST ST
Kokkari
400
BU
S
GTON ST
1000
1000
Globe
M
1000
1200
1200
1600
1600
FRANKL
ST
ST 1 2
GEARY ST
STA R
NORTH FINANCIAL DISTRICT
WASHIN
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SYDN EY WALT ON PARK
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1200
1600
1800
1800
GOUGH
SUTTER
AY
GRANT
ST
1400
1400
1400
1800
2000
ENTO ST
SACRAM
1400
BUSH ST
200
Jeanty at Jack's
1600
PINE ST
AY BROADW
200
CHIN ESE REC . CTR.
800
T PE
ON STOCKT
Cafe Roma
POWELL
1600
1800
2000
GTON ST
1400
1400
r7
Pie
Tommaso's
CLAY ST
NIA ST
ST
400
Enrico's
ST
CLAY ST
1400
VALLEJO 200
House
ST
JACKSON
ST
WASHIN
1200
r9
Pie
GREEN ST
CO
N CHIN ATOW PARK
1600
VAN NESS / CIVIC CENTER
1200
PLAY GROU
MASON ST
ST
1600
1600
2000
1400
ST
1600
# of Buildings: 194 Sq. Ft. 6,769,219 Class A Avg. Rents: $37.20 psf
GOLDEN
PACIFIC
ST
JACKSON
1400
HAYWARD
TAYLOR
1800
1800
2000
2200
2200
00
CALIFOR
ESSWAY GEARY EXPR
Molinari Deli
5
r1
Pie
400
Stinking Rose
PACIFIC
ENTO ST
1600
ST
VALLEJO
1400
SACRAM
1600
Calzones
AY BROADW
CLAY ST
1800
GREEN ST
UNION ST
200
AY BROADW
WASHIN
1800
Jianna
BUPistol S ST
ST
GTON ST
1800
1400
INA H COO LBRIT PARK
VALLEJO
WELL S HELE N ND PLAY GROU
JACKSON
La Felce
Rose a
M
ST
2200
AVE
AY BROADW
ST1 6
UNIONCST O LU
1400
1600
PACIFIC
Washington Bar Square Grill &
Moose's
7
r1
Pie
FILBERT ST
400
TON
GREEN ST
1000
ST
VALLEJO
JONES ST
1200
UNION ST
SANSOM
1800
Mama's Washington Square
LEVI' S PLAZ A
LEVI' S PLAZ A
FILBERT ST WAS HING SQUA RE
1800
2000 1000
ORTH ST LEAVENW
HYDE ST
400
LARKIN
ST 1
GREEN
2200
ST
IN ST
2400
POLK ST
VAN NESS
FRANKL
GOUGH
1600
2000
2000
2400
1200
00
PION EER PARK
1600
2200
2200
2200
00 ICH8 ST
2400
2600
ST1 4 UNION
1600
ICH ST
GREENW
FILBERT ST
Starbucks Il Fornaio Chili Up!
400
9
r1
Pie
ST ENWICH
GRE
GREENW
GELO MICH ELAN ND PLAY GROU
Pie Fog City Diner
# of Buildings: 217 Sq. Ft. 6,886,774 Class A Avg. Rents: $42.20 psf
1800
0
2600
2800
ST
FILBERT
MERY ST
LOM
BEAC H NORT H ND PLAY GROU
2000
0
1200 1000
MONTGO
2800
8
3
r2
D ST LOMBAR
200
400
600
1400
WHITING
BARD ST
600 00
8 D ST
ST
200
NORTH WATERFRONT / JACKSON SQUARE 1800
2000
2600
UT ST
LOMBAR
SC
Houston's
ST
UT ST
CHESTN
CHESTN
800
CI
Butterfly
KEARNY
0
ST
2000
2200
2400
3000
0
Tan's Cafe
ST FRANCISCO
400
Albona Ristorante
0
DE RO
GRANT
Trader Joe’s
ST
2000
Caesar's
600
BAY ST
FRANCISCO
MARB LE ALIC E COU RT TENN IS
ST
0
BAY ST
400
1000
D ST
ICH GREENW
GRANT
0
200
2200
2
2600
2600
2600
1
800
HILL PARK
LOMBAR
1400
AR CA
2200
Cost Plus Barnes & Noble
ST
1200
ON ST STOCKT
T ST
NORTH POIN
ST
UT
ST
400
1
CHESTN
POWELL
ST
2400
ST
AVE
RUSS IAN
MB
T ST
1000
BAY ST
TH EE
POIN NORTH Pescatore Cafe
LARKIN
T ST
ST
BEACH
400
800
NORTH POIN
3000
VAN NESS
POLK ST
S
200
400
BEACH ST
M
BU
ST
The Anchorage
ST
LU
JONES ST
CO
ORTH ST LEAVENW
HYDE ST
MARI TIME CISC O PARK SAN FRANL HIST ORIC NATI ONA
TAYLOR
JEFFE
The Argonaut
AN
1/2
MASON
RSON ST
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San francisco office third quarter
EL DORADO ST
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SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
OFFICE UPDATE AND Q3 2008 IN REVIEW By Dave Karol, Senior Financial Analyst & Sales Associate This third quarter was one of the most tumultuous quarters in recent history. Headline after headline of the crisis in the financial markets spilled over into all sectors of the economy. While San Francisco’s tenancy is more diverse than that of New York, the fallout of Wall Street is still felt here. Here is a brief summary of San Francisco’s exposure to the turmoil in the market: Lehman Brothers – Was the first investment bank to file for bankruptcy since 1990, and based on assets it is the largest bankruptcy in American history. Relative to Lehman’s 1.1 Million Square foot headquarters in New York, their space in San Francisco is minimal: • 555 California – 60,766 sq. ft. on floors 30 & 41. The lease expires in September, 2011. AIG – Received an $85 Billion bailout from the federal government to prevent bankruptcy. In return the government received 100,000 convertible stock shares that equate to a 79.9% equity stake in the company. AIG signed a renewal and expansion of their space in 2007: • Rincon Center (101 & 121 Spear Street) – 190,152 sq. ft. (42% of the property). The lease expires in July, 2017. AIG recently put $10.8M into their space as part of their renewal. Work to be completed in March, 2009. When the work is completed 23,395 sq. ft. of temporary space will be given back. • 50 California – 4,443 sq. ft. on the 33rd floor. Lease expires June, 2009. • 555 California – 10,271 sq. ft. on the 31st floor. Lease expires July, 2010. Washington Mutual (WaMu) – With over $300 Billion in assets, made headlines as the biggest bank failure in U.S. history. They saw a “run on the bank” resulting in customer withdraws of $16.7 Billion in the 10 days following Lehman’s bankruptcy. The Seattle-based company was seized by federal regulators who, in the interest of protecting depositors’’ savings, sold the company’s banking assets to JP Morgan Chase for almost $2 Billion. • 123 Mission – 105,543 sq. ft. (32% of the property) on Floors 4-9, 19 & 27. The lease expires December, 2010 excluding the 27th floor which expires June, 2012. • 201 Mission – 62,591 sq. ft. (13% of the property) on floors 7 & 10-12. The lease
expires November, 2010. The space houses WaMu Card Services. Merrill Lynch – After being battered by the housing crisis and seeing their stock drop 78% in 12 months, Merrill Lynch was able to dodge a complete failure by opting for a $50 billion stock buy-out by Bank of America. Merrill Lynch leases over 275,000 sq. ft in the city: • 101 California 184,434 sq. ft. (65,000 subleased) on floors 9, 11-14, 19-21, 24 & 25. The lease expires October 2012 • 600 California – 47,789 sq. ft. on floors 7, 8 & 15 through October, 2014. • 220 Montgomery – 15,410 sq. ft. on the 6th floor through January, 2011. First Republic – Having been acquired by Merrill Lynch in 2007 for $1.8 billion, their future has now been put into question due to the sale of their parent company. There are several possibilities: B of A may roll up some or all of First Republic’s operations, they might leave the bank untouched, and it’s reportedly possible that First Republic may purchase itself back from B of A and return to independent banking. First Republic is headquartered in San Francisco: • 111 Pine – 113,777 sq. ft. (15,107 sq. ft. is retail space) on floors 1-9. • 388 Market (1 Pine) – 83,000 sq. ft. on floors 2-5, 11&12.
Leasing After an upward trend lasting over 4 years, rental rates are beginning to show signs of slippage. Class “A” asking rates have dropped to an average of $44.07, a decline of 6% from last quarter. Some submarkets have been more resilient than others. SOMA, which has historically been favored by creative companies as opposed to financial services, saw no drop in average asking rates. For landlords with premier view and creative spaces, premium rental rates can still be achieved. Some owners have already reassessed their pro-forma and backed down from their ambitious underwriting. In this market, the only tenants making decisions are those who have expiring leases or are in need of expansion space. For those who still have some term left and were considering signing an early renewal, the general attitude in the market has been to “wait and see”.
Wachovia – Currently Citigroup and Wells Fargo are competing to purchase all, or a portion of, the company. • 4 Embarcadero Center – 63,000 sq. ft. (21,000 subleased) on floors 7-9. The lease expires October, 2010. • 555 California – 30,087 sq. ft. on the 23rd floor. The lease expires January, 2015. Heller Ehrman LLP - After failing to find a Merger and Acquisition partner the 119year old firm is in dissolution mode. • 333 Bush – 251,300 sq. ft. on floors 7-11 & 26-34. The lease expires June, 2018. Development In July you could hear the pylons being pounded into the ground at 535 Mission. It is the first new office project to break ground in the financial district since 555 Mission began construction in 2006. The 293,750 square foot building is scheduled for completion in 2010. The developer, Beacon Capital Partners, is seeking LEED certification for Core & Shell.
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SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
OFFICE MARKET SUMMARY 3rd Quarter, 2008 Submarket North Financial District South Financial District North Waterfront/Jackson Sq. Van Ness/Civic Center Union Square SoMa** San Francisco Office Market
Net Rentable Area * 28,816,470 24,146,886 6,886,774 6,769,219 5,887,190 10,630,651 83,137,190
Availability 3,608,916 2,512,679 645,664 614,377 525,054 2,112,764 10,019,454
Total Vacancy 3 9.67% 7.40% 7.07% 7.26% 8.21% 19.87% 9.80%
Total Availability 12.52% 10.41% 9.38% 9.08% 8.92% 19.87% 12.05%
Average Asking Rate 1 Class A Class B Class C Q3 Net Absorption 2 $45.30 $37.00 $30.00 (290,850) $44.20 $37.00 $29.00 (165,582) $42.40 $36.50 $29.00 (75,596) $37.20 $32.00 $30.00 (35,366) $39.70 $36.00 $30.00 (32,961) $39.79 $35.87 $29.67 (261,908)*** $44.07 $36.00 $29.67 (862,263)***
** SoMa Inventory includes the following markets: South of the Market; Yerba Buena; Multimedia Gulch; Mission Bay; South Beach; Inner Mission & Potrero Hill
*** 390,000 square feet at 370 Third Street were added to SOMA inventory Q3 2008
Historical Trends Class A
Quarter 2004/Q3 Q4 2005/Q1 Q2 Q3 Q4 2006/Q1 Q2 Q3 Q4 2007/Q1 Q2 Q3 Q4 2008/Q1 Q2 Q3
Total RSF 43,979,849 44,284,268 44,430,772 45,526,350 45,134,630 44,794,249 45,181,682 45,265,952 45,267,770 45,278,227 46,668,376 46,663,509 46,663,509 46,663,509 47,322,203 47,595,475 47,595,475
Direct Vacant 5,565,317 5,544,641 5,828,447 5,773,841 4,934,788 4,644,515 3,802,372 3,899,723 3,412,272 3,224,700 3,422,734 3,286,066 3,083,395 2,976,387 2,754,242 3,243,799 3,448,110
Sublet Vacant 1,890,183 1,781,343 1,131,954 1,130,434 1,408,976 1,246,239 717,040 692,683 583,281 643,023 441,075 487,191 355,421 352,776 365,733 393,792 744,607
Vacancy 17.0% 16.5% 15.7% 15.2% 14.1% 13.2% 10.0% 10.1% 8.8% 8.5% 8.3% 8.1% 7.4% 7.1% 6.6% 7.7% 8.8%
Absorption 354,905 129,516 365,583 60,241 464,534 303,271 283,495 111,350 213,537 210,841 91,954 92,522 240,597 154,149 28,808 (325,481) (253,332)
Rental Rates 1 $28.60 $28.60 $29.70 $31.57 $32.56 $33.40 $33.46 $35.27 $35.88 $36.80 $42.02 $43.32 $46.82 $46.82 $46.91 $46.94 $44.07
HISTORICAL VACANCY VS. LEASE RATES
1
Rates are Quoted as Full Service Absorption is based on available square footage and may vary from Vacancy 0 – 3% 3 Vacancy is based on vacant square footage * Includes all Classes of Office Space 2
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SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
OFFICE MARKET HIGHLIGHTS - LEASING BY THE NUMBERS
±105,000 Square feet of space was taken by Pfizer, Inc. at 455 Mission Bay Boulevard. Pfizer’s subsidiary, Rinat Neuroscience out of South San Francisco, will occupy the entire South Wing of 455 Mission Bay Boulevard when the project is completed in January, 2010. Pfizer also has an option on 50,000 square feet in the adjacent building (the East Wing). They signed a fifteen year lease. 455 Mission Bay Boulevard Significant Leases (By Square Foot) Top 5 Leases Tenant Pfizer, Inc. Squire, Sanders & Dempsey LLP Arup ( S ) Carroll Burdick & McDonough ( R ) Symantec ( R ) ( E )
Lessor (Sublessor) Alexandria Real Estate TIAA-CREF JP Morgan Chase State Teachers Retirement System of Ohio Kennedy & Associates
Address 455 Mission Bay Boulevard 275 Battery Street 560 Mission Street 44 Montgomery Street 303 2nd Street
Sq. Ft. 105,000 67,000 49,726 49,528 44,963
Pending Leases Tenant Autodesk Lieff Cabraser Heimann & Bernstein LLP ( R ) OpenTable.com Norcal Waste Systems, Inc. ( R )
Lessor (Sublessor) Glenborough Realty Trust, Inc. TIAA-CREF CFRI Market Street, LLC Arden Realty
Address 60 Spear Street 275 Battery Street 799 Market Street Golden Gateway Commons
Sq. Ft. 116,321 46,000 35,000 25,000
Top 5 Contiguous Spaces (available in 12 months) Address 1355 Market Street (Connects w/ 875 Stevenson) 370 Third Street 555 Mission Street (Under Construction) 650 Townsend Street 500 Terry Francois Blvd.
Lessor (Sublessor) The Adco Group JER / Lane Partners Tishman Speyer TMG Partners CBRE Investors Strategic Partners
Sq. Ft. 405,000 358,582 319,850 313,376 268,245
R: Renewal E: Expansion S: Sublease
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SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
OFFICE MARKET HIGHLIGHTS - SALES BY THE NUMBERS
±267,446 Square feet of class “B” Union Square space at 760 Market Street has been sold by Westcore Properties of San Diego who owned the building since 2007. The new ownership, Thor Equities, is looking to reposition the building. Best Buy just subleased +30,584 square feet of retail space on the ground floor.
760 Market Street Significant Sales Top Building Sales for Q3 2008 Building 760 Market Street (Phelan Building)
Sq. Ft. 267,446
Top Buildings for Sale Over 50,000 Square Feet Building Sq. Ft. One Montgomery Tower (120 Kearny St) * 777,120 555-575 Market Street (Market Center) 770,044 One Sansome Street 652,463 Rincon Center (101/121 Spear St) 580,850 201 Mission Street 483,582 211 Main Street 373,769 221 Main Street 350,000 400 Howard Street (Froundry Square I) 335,000 601 California Street 253,809 235 Pine Street 207,500 1035 Market Street 98,023 101 Howard Street 83,500
Seller Westcore Properties
Buyer Thor Equities
Class B
Seller Nippon Life (NPI) RREEF Broadway Partners Real Estate Fund III Beacon Capital Partners PruUk (LaSalle Investment Management) The Booth Family The Booth Family Morgan Stanley / Glenborough Lincoln Properties / State of Illinois Alecta RE Seligman Western Enterprises The Booth Family
Buyer TBD TBD Mirae Asset MAPS Investment Management TBD TBD TBD TBD TBD TBD TA Realty TBD TBD
Class A A A A A B B A A A B B
Owner Shorenstein Company Tishman Speyer Properties Alexandria Joseph & Maria Fang Beacon Capital Partners RREEF / CalPERS
Location Mission Bay South Financial District Mission Bay North Financial District South Financial District South Financial District
Completion Date Q4-2008 Q4-2008 Q1-2009 Q2 -2009 2010+ 2010+
Owner Tishman Speyer Properties Lincoln Properties GLL Real Estate Partners Shorenstein Company Wilson Meany Sullivan / Stockbridge
Location South Financial District North Financial District South Financial District North Waterfront South Financial District
Status Planning Approved Planning Planning Approved
* Represents a 50% Interest. Includes Crocker Galleria (52,704 square feet of retail space) Projects Under Construction (By Completion Date) Building Sq. Ft. 499/409 Illinois Street * 450,000 555 Mission Street 550,000 1500 Owens Street 157,929 1 Kearny Street ( R ) ( E ) 94,000 535 Mission Street 293,750 680 Folsom Street ( R ) 350,000
Major Tenant(s) Fibrogen DLA Piper / Gibson Dunn None None None None
* 240,000 square feet leased to Fibrogen R: Renovation E: Expansion Projects Planned Building 222 Second Street 350 Bush Street / 500 Pine Street 350 Mission Street Piers 27-31 505 Howard Street (Foundry Sq. III)
Sq. Ft. 617,000 350,000 385,000 300,000 252,500
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SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
C&C FOCUS – TIER 1, 2, & 3
ENERGY STAR
LEED - Certified
LEED - Pending
6
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
C&C FOCUS – TIER 1, 2, & 3
ENERGY STAR
LEED - Certified
LEED - Pending
7
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
NORTH FINANCIAL DISTRICT MARKET SUMMARY 3rd Quarter, 2008
Building Class A B C
Total RSF 21,482,945 6,477,223 856,302 28,816,470
Overall 9.3% 11.3% 6.3% 9.67%
Vacancy Rate Direct 7.1% 10.4% 6.3% 7.83%
Sublet 2.2% 0.8% 0.0% 1.84%
Overall 2,576,484 973,717 58,715 3,608,916
Availability (SF) Direct Sublet 1,959,519 616,965 906,967 66,750 57,762 953 2,924,248 684,668
Net Absorption Current Quarter Q2 '08 Rental Rates1 (286,019) (134,611) $45.30 (9,504) (47,760) $37.00 4,673 626 $30.00 (290,850) (181,745)
Historical Trends Class A
Quarter
Total RSF
Direct Vacant
Sublet Vacant
Vacancy
Absorption
Rental Rates
2004/Q3
19,838,132
2,680,889
777,290
16.5%
(104,547)
$29.90
Q4
19,838,132
2,669,307
535,675
17.4%
(191,053)
$30.60
2005/Q1
19,838,132
2,818,136
449,393
16.2%
253,197
$31.10
Q2
19,819,889
2,828,293
487,826
16.5%
(62,593)
$32.75
Q3
19,805,988
2,365,519
507,236
16.7%
(41,960)
$33.01
Q4
19,817,460
1,922,272
637,961
14.5%
157,926
$34.31
2006/Q1
19,817,460
1,773,127
314,449
12.9%
243,229
$34.75
Q2
19,890,190
1,731,564
337,550
10.5%
108,358
$34.75
Q3
19,895,019
1,557,068
292,971
10.4%
51,837
$36.40
Q4
19,895,019
1,505,161
289,094
9.3%
225,615
$37.00
2007/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)
$43.24
Q3
20,968,597
1,381,444
181,956
9.2%
(17,312)
$45.15
Q4
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
$48.30
Q2
21,482,945
1,430,829
153,364
7.4%
(134,611)
$48.30
Q3
21,482,945
1,525,829
477,404
9.3%
(286,019)
$45.30
HISTORICAL VACANCY VS. LEASE RATES
1 *
Rates are quoted as Full Service The Piers 1.5, 3, 5 were added to North Financial District Class A Q1 2008
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SAN FRANCISCO
SAN FRANCISCO OFFICE THIRD QUARTER
NORTH FINANCIAL DISTRICT MARKET SUMMARY BY THE NUMBERS
±251,300 Square feet is going to be available at 333 Bush Street as Heller Ehrman LLP closes its doors.
9.3% Class “A” vacancy for the North Financial District submarket, increasing 1.8% since last quarter.
$45.30 Per Square foot (Full Service) for Class “A” space, a decline of 6.21% quarter-over-quarter.
HISTORICAL DIRECT VS. SUBLEASE AVAILABLE SPACE
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SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
SOUTH FINANCIAL DISTRICT MARKET SUMMARY 3rd Quarter, 2008
Building Class A B C
Total RSF 19,612,763 3,311,891 1,222,232 24,146,886
Overall 7.9% 5.7% 4.4% 7.40%
Vacancy Rate Direct 6.9% 5.2% 4.1% 6.54%
Sublet 1.0% 0.5% 0.2% 0.86%
Overall 2,053,514 371,809 87,356 2,512,679
Availability (SF) Direct Sublet 1,761,070 292,444 293,949 77,860 84,533 2,823 2,139,552 373,127
Net Absorption Current Quarter Q2 '08 Rental Rates1 (73,457) 37,426 $44.20 (87,197) 37,338 $37.00 (4,928) 7,266 $29.00 (165,582) 82,030
Historical Trends Class A
Quarter
Total RSF
Direct Vacant
Sublet Vacant
Vacancy
Absorption
2004/Q3
19,687,636
2,353,253
755,277
15.8%
259,685
Rental Rates $29.20
Q4
20,081,418
2,382,289
804,855
15.9%
(78,614)
$30.30
2005/Q1
20,116,732
2,322,185
609,930
14.6%
254,244
$31.10
Q2
20,116,732
2,172,607
603,502
13.8%
217,661
$31.75 $32.53
Q3
20,123,913
1,810,178
562,883
11.8%
112,402
Q4
19,772,060
1,934,028
477,212
12.2%
(38,490)
$33.40
2006/Q1
20,159,493
1,328,836
358,395
8.4%
63,342
$33.40
Q2
19,086,992
1,354,408
325,959
8.8%
41,720
$35.70
Q3
19,094,438
1,271,296
257,646
8.0%
(70,444)
$36.00 $37.10
Q4
19,094,438
1,038,200
262,045
6.8%
228,697
2007/Q1
19,128,276
991,788
160,721
6.0%
252,536
$42.67
Q2
19,128,276
998,881
142,012
6.0%
13,586
$43.40
Q3
19,128,276
1,157,348
92,021
6.5%
114,922
$47.60
Q4
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)
$47.60
Q2
19,612,763
1,153,898
158,734
6.7%
37,426
$47.60
Q3
19,612,763
1,357,040
187,752
7.9%
(73,457)
$44.20
HISTORICAL VACANCY VS. LEASE RATES
1 *
Rates are quoted as Full Service 345 Spear (Hills Plaza) was moved from SOMA to South Financial District Class “A” Q1 2008
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SAN FRANCISCO
SAN FRANCISCO OFFICE THIRD QUARTER
SOUTH FINANCIAL DISTRICT SUMMARY BY THE NUMBERS
535 Mission Street began construction in July. This 293,750 square foot building is scheduled for completion in 2010. Currently without any signed leases, the property is being built on spec.
50 Beale Street pulled off the market. Offers came in well below Broadway Partners’ desired selling price. Blue Shield occupies 41.7% of the building through December, 2018.
7.4% Overall vacancy and 7.9% Class “A” vacancy for the South Financial District submarket, increasing 1.04% and 1.2% respectively quarter-over-quarter.
HISTORICAL DIRECT VS. SUBLEASE AVAILABLE SPACE
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SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
NORTH WATERFRONT/JACKSON SQUARE MARKET SUMMARY BY THE NUMBERS
+11,306 Square foot early renewal along with a +6,700 square foot expansion signed by SB Architects, Inc. at 1 Beach Street was the largest deal of the quarter in North Waterfront/Jackson Square. SB Architects, Inc. was represented by Jonathan Allen and John Norton of Cornish & Carey Commercial. 11,907 Square feet of positive Class “A” absorption in the North Waterfront / Jackson Square submarket. 7.07% Overall vacancy for the Waterfront / Jackson Square submarket.
Building Class A B C
Total RSF 1,678,713 3,707,546 1,500,515 6,886,774
Overall 5.9% 8.2% 5.5% 7.07%
Vacancy Rate Direct 5.8% 8.1% 5.5% 6.97%
North
Sublet 0.2% 0.1% 0.0% 0.10%
Overall 136,673 418,870 90,121 645,664
Availability (SF) Direct 130,386 382,665 89,321 602,372
Sublet 6,287 36,205 800 43,292
Net Absorption Current Quarter Q2 '08 Rental Rates1 11,907 17,021 $42.40 (56,122) (27,478) $36.50 (31,381) 280 $29.00 (75,596) (10,177)
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SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
VAN NESS/CIVIC CENTER MARKET SUMMARY BY THE NUMBERS
7.26% Overall vacancy for the Van Ness / Civic Center submarket.
4.3% Class “A” vacancy for the Van Ness / Civic Center submarket, making it one of the tightest markets to find Class “A” space in San Francisco.
6,964 Square feet of negative Class “A” absorption in the Van Ness / Civic Center submarket.
Building Class A B C
Total RSF 2,105,547 2,653,592 2,010,080 6,769,219
Overall 4.3% 11.9% 4.3% 7.26%
Vacancy Rate Direct 4.2% 11.8% 4.0% 7.12%
Sublet 0.1% 0.1% 0.3% 0.14%
Overall 108,277 409,370 96,730 614,377
Availability (SF) Direct 106,239 314,206 91,362 511,807
Sublet 2,038 95,164 5,368 102,570
Net Absorption Current Quarter Q2 '08 Rental Rates1 (6,964) 27,254 $37.20 1,192 4,238 $32.00 (29,594) (38,016) $30.00 (35,366) (6,524)
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SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
UNION SQUARE MARKET SUMMARY BY THE NUMBERS
5.0% Class “A” vacancy for the Union Square submarket, unchanged from Q2 2008.
$39.70 Per Square foot (Full Service) for Class “A” space.
32,961 Square feet of negative absorption for all classes of space in the Union Square submarket.
Building Class A B C
Total RSF 181,715 3,037,002 2,668,473 5,887,190
Vacancy Rate Overall Direct 5.0% 5.0% 6.9% 6.6% 10.0% 9.8% 8.21% 7.99%
Sublet 0.0% 0.3% 0.2% 0.22%
Overall 9,075 228,891 287,088 525,054
Availability (SF) Direct 9,075 212,855 263,195 485,125
Sublet 0 16,036 23,893 39,929
Net Absorption Current Quarter Q2 '08 Rental Rates1 0 662 $39.70 (32,611) 64,645 $36.00 (350) (28,661) $30.00 (32,961) 36,646
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SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
THIRD QUARTER
15
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
SOMA MARKET SUMMARY By Riccardo Gale & Marc Trovato In light of current economic conditions, the SOMA market remained fairly strong throughout the third quarter of 2008. Average asking rates held firm at $34.52 and tenants absorbed 128,000 square feet of office space. However, the re-introduction of at 370 Third Street added 390,000 square feet of new supply to the market, resulting in 262,000 square feet of negative net absorption and a modest increase in vacancy to 19.87%. Core SOMA properties continue to command premium rents. For example, Slide leased 36,000 square feet at 301 Brannan in the low $40’s Industrial Gross, and Coverity relocated and expanded at China Basin to 26,000 square feet in the high $40’s per rentable square foot, fully serviced. However, asking rents in non-core properties continue to fall, as landlords react to softening demand for these properties and competition from new sublease availabilities. For example, 539 Bryant completed two leases in the low $30’s, and 642 Harrison is being marketed at that same rate. Availability of high quality, creative, open-plan space remains limited. Some of the more desirable available spaces in the market include:
410 Townsend Street – up to 40,000 RSF (in 10,000 RSF increments) of brick & timber office space 500 Third Street – 8,000 RSF of bright, open, high-ceiling space with downtown views 139 Townsend Street – 11,000 RSF of creative brick and timber, full floor space near the Ballpark
185 Berry Street – 17,500 RSF of quality creative space with waterfront views 72 Townsend Street - 30,000 RSF creative full building lease opportunity with turn-key improvements
(where sublease availability has increased significantly) may continue to push rents lower.
Despite the strong performance of the SOMA market this quarter, concerns loom on the horizon. Significant pending leases are few and far between. Venture capital funding, which is so vital to the growth of the technology sector, is at its lowest level in recent memory. According to Dow Jones VentureSource, the IPO’s and M&A’s of venture-backed companies generated just $4.57 billion this quarter, down 66% from the third quarter of 2007. Tempered demand and increased supply of office space, such as the 190,000 square feet of office space to be reintroduced at 875 Howard Street next quarter, may suppress rental rates in the near future. It is anticipated that some companies will downsize and/or cease operations, adding sublease space to the market and further lowering asking rates on direct space. Tenants who can afford to delay major lease commitments may be well suited to do so. In conclusion, the SOMA office market has remained relatively strong through the third quarter, primarily due to the continued strength of the technology sector. The leasing market has seen robust activity and sustained rent levels, though a lack of access to capital has all but silenced the investments market, with no significant transactions occurring for the second consecutive quarter. General economic conditions will likely temper demand across all sectors, while an increasing supply of direct and sublease space in SOMA and in the central business district
Overall Rent vs. Vacancy 3Q ’07 to 3Q ‘08
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SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
SOMA MARKET SUMMARY 3rd Quarter, 2008 Submarket
# of Buildings
Total Sq. Ft.
Available Sq. Ft.
Vacancy Rate
Average Asking Rent
Absorption Sq. Ft.
South Beach
19
2,241,187
253,637
11.32%
$35.96
71,765
Multimedia Gulch
39
3,964,074
946,510
23.88%
$40.15
12,205
Yerba Buena / South of Market
19
2,591,710
454,042
17.52%
$39.60
(337,479)
Potrero Hill / Inner Mission
13
1,219,132
185,303
15.20%
$32.78
(8,399)
Mission Bay
5
614,548
273,272
44.47%
$55.00
0
Totals:
95
10,630,651
2,112,764
19.87%
$34.52*
(261,908)**
* Excludes 500 Terry Francois & China Basin Landing addition; Rates are based on a weighted average for available space only ** 390,000 square feet at 370 Third Street were added to SOMA inventory Q3 2008
SOMA Top Ten Buildings Stories
Building Sq. ft. Total
1Rates Direct Avg.
Direct Sq. Ft.
Sublease Sq. Ft.
Total Avail. Sq. Ft.
Avail. Total Percent
185 Berry Street
6
939,549
$58.25*
229,441
0
229,441
24.4%
475 Brannan Street
4
255,000
$48.00
0
0
0
0.0%
444 DeHaro Street
2
152,000
$35.00
51,213
0
51,213
33.7%
160 King Street
10
167,983
$46.00
6,300
69,656
75,956
45.2%
350 Rhode Island St. South
4
139,509
$38.00
34,841
0
34,841
25.0%
501 2nd Street
7
207,809
$41.00
9,603
4,992
14,595
7.0%
625 2nd Street
4
134,447
$46.00
0
0
0
0.0%
139 Townsend Street
5
57,782
$42.00
21,341
0
21,341
36.9%
410 Townsend Street
4
80,000
$34.00
39,218
0
39,218
49.0%
650 Townsend Street
6
710,400
$33.00
376,527
16,865
393,392
55.4%
Building
1
Rates are Quoted as Full Service * Rate includes new addition of approximately 175,000 RSF
Largest Contiguous Spaces Address
Square Feet Available
370 3rd Street
358,582
650 Townsend Street
313,376
500 Terry Francois Blvd.
268,245
185 Berry Street
175,000
160 King Street
56,963
303 2nd Street
40,145
410 Townsend Street
39,218
350 Rhode Island Street
34,841
17
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
SOMA MARKET SUMMARY Top Leases Tenant
Lessor
Pfizer, Inc.
Alexandria Real Estate
Square Feet 105,000
Address 455 Mission Bay Boulevard
Symantec ( R ) ( E )
Kennedy & Associates
44,963
303 2nd Street
Nokia ( R )
TMG Partners
39,706
650 Townsend Street
Kennedy Jenks
Kennedy & Associates
38,175
303 2nd Street
Slide
Watson Breevast
35,373
301 Brannan Street
SF Unified School District
Amerimar
35,000
1550 Bryant Street
Comcast
JER / Lane Partners
31,418
370 3rd Street
Coverity ( C ) ( E )
RREEF
26,000
185 Berry Street
Live Nation
251 Rhode Island, LLC
20,142
251 Rhode Island Street
RG/A
Sherman Clay
16,242
35 South Park
Global IP Solutions
642 Harrison & Hawthorne, LLC
12,448
642 Harrison Street
Jaspersoft
PMI
9,779
539 Bryant Street
OPSWAT ( S )
Paul Hockett
8,032
640 2nd Street
Top Pending Leases Tenant
Lessor
OpenTable.com
CFRI Market Street, LLC
Square Feet 35,000
799 Market Street
Address
Undisclosed Tenant ( S )
Macy's.com
16,000
22 4th Street
Undisclosed Tenant
TMG Partners
15,000
650 Townsend Street
Undisclosed Tenant
Apollo Real Estate Advisors
8,300
444 De Haro Street
Top Building Sales *No SOMA Sale Transactions this Quarter.
SOMA Top Picks Location
Floor(s)
Minimum Size
Maximum Size
Asking Rent
Comments
410 Townsend Street
2nd & 3rd
10,000
40,000
$34.00
Creative Brick & Timber with Parking. Nicely finished.
500 3rd Street
Partial 5th
10,200
10,200
$35.00
Great lofty, open concrete ceiling space. Good City view.
139 Townsend Street
2nd
11,000
11,000
$40.00
Creative Brick & Timber full floor. Great location.
185 Berry Street
2nd
17,500
17,500
$45.00
Creative, high ceiling space with Bay views.
Ground
25,000
30,000
$38.00
Very creative full building. Landlord will turn-key improvements.
72 Townsend Street
(E)
= Expansion
(R)
= Renewal
(S)
= Sublease
(C) = Cornish & Carey Involvement
18
SAN FRANCISCO OFFICE THIRD QUARTER
SAN FRANCISCO
AGENT ROSTER LEASING Jonathan Allen
INVESTMENTS John Norton
David Karol
415.445.5138 [email protected]
415.445.5137 [email protected]
Karl Baldauf
Bart O’Connor
Michael Leggett
415.445.5117 [email protected]
415.445.5102 [email protected]
415.445.5101 [email protected]
John Cashin
Will Scovill*
Rita Meehan
415.445.5112 [email protected]
415.445.5134 [email protected]
415.445.5135 [email protected]
Donnette Clarens
Nick Slonek
Chris Pawlik
415.445.5120 [email protected]
415.445.5100 [email protected]
415.445.5103 [email protected]
Shannon Dolan
Marc Trovato
Gerry Rohm
415.445.5105 [email protected]
415.445.5118 [email protected]
415.445.5104 [email protected]
Riccardo Gale
415.445.5133 [email protected]
MARKET RESEARCH El Beh 415.445.5114 [email protected]
Jacki Wong
415.445.5119 [email protected]
415.445.5107 [email protected]
Raquel Ledesma 415.445.5136 [email protected]
Sam Liss 415.445.54109 [email protected]
Jim Lucas 415.445.5106 [email protected]
Melinda Miyagishima 415.445.5108 [email protected]
Todd Motoyoshi 415.445.5122 [email protected]
RETAIL LEASING
C&C CAPITAL
OFFICE ADMIN.
Tracy Chiao
Matthew Gum
BK Masterson
415.445.5140 [email protected]
415.445.5116 [email protected]
415.445.5150 [email protected]
Erika Elliott
J.P. Hailer
415.445.5124 [email protected]
415.445.5111 [email protected]
Marissa Miller
Eric Movsessian
415.445.5139 [email protected]
415.445.5123 [email protected]
Rachel Pagan
Brad Zampa
415.445.5121 [email protected]
415.445.5115 [email protected]
Julie Taylor 415.445.5128 [email protected]
* Indicates Life Science Specialist
19
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