By Robert Sammons, Regional Director – Northwest U.S. Research
When I was growing up in the South, every town had at least one restaurant that was considered a “meat and three.” Of course, the “big cities” such as Macon or Savannah had several of these places. Generally open just for lunch, it was a great spot to get a “well-rounded” meal of overcooked vegetables and meat (all or some of it was, of course, fried!). The local joint in Macon was H&H – still going strong by the way. In Nashville, it was The Loveless Café (though honestly it was the breakfast I went for there). When I moved to Atlanta it was either The Colonnade or Mary Mac’s Tea Room for me. I never really found one in New York City in the 19 years I was there. But apparently they do exist in San Francisco (anyone for lunch?). Even the WSJ has published a story on some of these spots. The reason I bring up food is that the statistics are all wrapped up for Q1 and I thought I would give you a quick bite of what happened across the major NorCal submarkets. Office is up first on the menu. I’ll give you the three (stats) and the meat (primary takeaway) – okay that’s somewhat in reverse order but you get where I’m going with this. All the stats for this meal are quarter over quarter, all classes and annual rents per square foot unless otherwise stated.
|Vacancy tumbled 60 bps to 11.4%||This 23.6 msf market has been steadily tightening with a vacancy rate now the lowest in 15 years.|
|Overall asking rent up by 0.9% to $24.33|
|Currently no office under construction|
|Leasing of 1.1 msf slowest Q1 since 2010||Feeling a few tech tremors with subleases up and leasing/absorption lower. But still a white hot market that needs a cool down.|
|Subleases up 35.5% in Q1 2016|
|Asking rent up but by just 0.4% to $68.44|
|Office vacancy up by 30 bps to 10.3%||That increase in vacancy and rise in the asking rent was due to completion of spec development which has since been leased.|
|Asking rent jumped by 4.0% to $55.19|
|Q1 absorption was positive at 115,922 sf|
|Vacancy was up in Q1 by 30 bps to 7.7%||There is 6.0 msf of office product under construction; 2.8 msf of that is speculative of which 800,000 sf will deliver this year.|
|Asking rent increase of 5.9% to $50.04|
|Largest deal in Q1 – Google at 278,000 sf|
|Vacancy climbed 10 bps for overall market||The mass transit oriented Oakland CBD recorded a vacancy rate of just 3.1%, descending from 8.5% one year ago.|
|Asking rent closed up 3.4% to $31.86|
|Zero office product under construction|
|Vacancy climbed 50 bps in Q1 to 12.5%||With record rents in Oakland and San Francisco, tenant activity is expected to increase within the BART submarkets.|
|Asking rent up by just 0.2% to $29.34|
|No office product under construction|
|Vacancy rate climbed 60 bps to 10.4%||Expect corporate consolidations to occur over the next couple of years which could add significant availability to the market.|
|Office asking rent up 2.6% to $29.83|
|Largest available blocks in the East Bay|
|Vacancy rate at Q1 was 12.8%, up 20 bps||The completion of Golden 1 Center and Downtown Commons is expected later this year but no new office construction yet.|
|Asking rent climbed 0.4% to $21.18|
|Absorption in the red in Q1 at -162,330 sf|
To see much more on these and many more markets, just head to http://www.cushmanwakefield.com/en/research-and-insight/.
This post is guest commentary from the latest weekly edition of our Bay Area Research Rant, which you can subscribe to for free by e-mailing firstname.lastname@example.org.
Robert Sammons is a Research Director for Cushman & Wakefield. 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.