By Robert Sammons, Senior Director, Northern California Research
Turns out we’ve all been wrong about how expensive San Francisco is – to work or live or play. According to the “Worldwide Cost of Living 2019” report by The Economist Intelligence Unit, San Francisco isn’t even in the top 10. Granted we are talking global markets, and the methodology is a bit different than many similar indices. According to information from The Economist, it “compares more than 400 individual prices across 160 products and services” in the “ranking of over 130 cities around the world. The base city is New York, which has an index set at 100.
So, exactly where does San Francisco land? Well it comes in at number 25 on the list with an index of 85. This market was one of the biggest movers in the ranks, “up” 12 spots from number 37 in the last survey. Even so, there are three U.S. markets ahead of us on the list – New York at number 7, Los Angeles at No. 10 and Minneapolis at No. 20. On the surface, the survey almost sounds as if we’re rather inexpensive, but think about it: it is saying that we are the 25th most expensive place to live on the planet. That’s rather an intense statement.
So, what are the priciest cities in the world to live according to The Economist? That would be a three-way tie between Singapore, Hong Kong and Paris. If you reside in San Francisco, just shush up and eat your $0.99 cup of noodles already so you can pay the rent. It could be worse! For more details on the process of the survey (conducted for over 30 years now) and the most/least expensive global markets, follow the link provided here.
For the second time recently, a “tech” company has leased a big block of space in a building that doesn’t exist yet. That in and of itself isn’t completely unusual as pre-leasing in projects yet to break ground does happen. However, both Salesforce and, now, Pinterest, have taken hundreds of thousands of square feet in projects that haven’t even been entitled, meaning they must still work their way through the San Francisco Planning Commission gauntlet, including pulling from the Prop M allocation. Both Salesforce (550 Howard Street in the Transbay district) and Pinterest (88 Bluxome Street in Central SoMa) expect to continue to grow in talent rich San Francisco. To do so in a market with a direct vacancy rate of well under 5.0% today, they are nailing down their future expansion needs ahead of the crowd.
The latest IPO wasn’t a tech company but it was a San Francisco company and one with a long history here – Levi’s. By all accounts it has had a successful launch. Up very soon will be a few local tech firms, including the aforementioned Pinterest plus Uber and Lyft that hope to raise a whole lot of money. Ka-Ching!
Lots more news around San Jose with yet more development planned. Meanwhile, biotech is red hot not only along the Peninsula but in the East Bay, too. And Oakland records some impressive sales prices for office buildings located in its core. Plus, lots of multi-family underway, but it’s still not enough.
This post is commentary from the latest weekly edition of our NorCal Newsline, which you can subscribe to for free by e-mailing firstname.lastname@example.org.
Robert Sammons is Cushman & Wakefield’s Senior Director, Northern California Research. Based in San Francisco, Robert’s principal roles include working closely with the C&W research teams across the Northwest – including Northern California, Portland and Denver. Robert is author of numerous documents that delve into a wide variety of real estate and economic trends. He has been a quoted source for all manner of real estate and related economic information in many widely known media outlets across the country. Robert has 29 years of real estate experience as both an appraiser and researcher. He earned a BBA in Real Estate from The University of Georgia and an MS in Real Estate from Georgia State University. Robert is a member of the Urban Land Institute.