By Robert Sammons, Senior Director, Northern California Research
The Bay Area has become a much more expensive spot for businesses and residents alike. I don’t think that should come as a surprise to anyone. Yet at the same time, many businesses continue to grow here due to the very deep talent pool of technology workers. Sure companies are expanding out of the Bay Area—to less expensive locales such as Utah and Tennessee and Texas and more (they are also expanding to other expensive areas such as New York City and DC—it’s about finding the talent). The entire operation of a company no longer needs to be located in just one spot. And with technology now a bigger slice of the employment and leasing pies, cities large and small alike will be getting at least crumbs if not a whole lot more. Because the choices are almost unlimited for technology workers in the Bay Area, it makes it easy to change jobs or even create your own start-up (we are surrounded by VCs after all). Yes the cost can be high, for companies and workers, though the possibilities can outweigh those costs.
Of course, that discourse is but for one portion of companies and workers in this region. There are many others left out of this ongoing boom—soon to be the longest in U.S. and Bay Area history. When those making six figures struggle to find an affordable place to live and, on top of that, when mass transit fails, well that isn’t good for anyone. To say we are the victim of our own success is being trite. Making it difficult to open a business, not spending the funds needed on transit (whether for its employees or infrastructure), not building enough workforce and middle-income housing, a significant homeless crisis. The fact is it’s not just a Bay Area issue on any of these fronts really, but it’s something that we, as one of the wealthiest and supposedly smartest regions on the planet, should be best at solving. Alas we haven’t figured it all out yet, though I remain hopeful for the future.
Which takes us to a wide variety of stories this week. One company is expanding out of San Francisco while another is looking to literally buy into it, plus a non-tech company grows here in a big way. As mentioned before, this is THE year of the IPO with Uber set to go public this month. And transit-oriented development is still a thing despite ride-sharing getting a bigger slice of the pie for commuters (and autonomous vehicles just around the corner too, right?!).
Meanwhile, the cofounder of the largest private company in San Francisco makes a big donation to study the homeless issue (we could use more of that please). Both The Mercury News and The New York Times agree we need much more housing. And Muni has yet another snafu.
In a topic written about it Newsline before, we’ve discussed how San Jose is undergoing quite the metamorphosis – from somewhat sleepy Silicon Valley outpost to the mixed-use center of it all. There are about 10 stories below on what’s been happening over just the past couple of weeks. Companies and developers all want a piece of that pie—for office and residential development that is, yes indeed, transit-oriented.
This post is commentary from the latest weekly edition of our NorCal Newsline, which you can subscribe to for free by e-mailing email@example.com.
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.