Silicon Valley Heads North - The Office Boom In SF's SoMa District
(Here is a guest post by Justin Bedecarré - a Real Estate Advisor at Cushman & Wakefield.)
By Justin Bedecarré
As entrepreneur after entrepreneur poured into the Mission Street bar Bruno's one Thursday night, for a tech startup party, the notion that we are trapped in a perfunctory recovery completely escaped my mind.
As San Francisco's banks and law firms continue to consolidate, fast growing firms such as Zynga are hiring hoards of engineers and salespeople and they need lots of office space. Zynga recently signed the biggest office deal in San Francisco in five years, according to the San Francisco Business Times.
As Palo Alto becomes more expensive...
Palo Alto is home for many startups and it is home to hot companies such as Facebook but competition for office space has driven up prices. Palo Alto office space now leases at comparable rates to the top floors of the Pyramid Building and the Embarcadero Centers in downtown San Francisco -- two of the top marquee buildings on the West Coast.
Since Palo Alto has become so expensive, start-up founders have wasted no time hopping on the Caltrain and setting up shop in SoMa. The brick-and-timber warehouse-turned-office buildings in SoMa now rent for similar rates as some Class A buildings in downtown San Francisco but it is still considerably less than Palo Alto.
SoMa also benefits from the fact that many startup founders call San Francisco home; and more and more top engineers and salespeople prefer to live in the city.
Employees don't just go to the office for their job, but they live and breathe it, constantly networking, hosting events, throwing launch parties, awards shows, PR Summits and conferences and San Francisco is where that happens.
Several venture firms have realized this and have built incubators that hold hundreds of entrepreneurs, from former Facebook and Twitter executives, to recent college grads, to experienced startup gurus, under one roof.
Incubators like The Hub at the Chronicle Building, I/O ventures in the Mission, KickLabs in South Beach, Dogpatch Labs by Polaris Venture Partners and SoMa Central at 153 Townsend. These startup communities are bustling and expanding. The Hub at 5th and Mission has more than doubled in size. [See the full SF Business Times article here.]
Silicon Valley is moving north...
As Silicon Valley's persona changes more to a "Media Valley," so have its borders. Silicon Valley now seems to be reaching north and drawing a new border up Fourth Street, across Market and down the Embarcadero.
While San Francisco has never been conducive to industrial production of hardware that suited Silicon Valley so well, it is primed to accommodate the proliferation of digital media startups.
Just take a look at this blog post: It will be tweeted on Twitter, posted on Wordpress and Posterous, 'liked' on Facebook, linked to on LinkedIn, shared on StumbleUpon, rated on Digg, posted on Quora, maybe even mentioned on GigaOM, Techcrunch, Mashable and VentureBeat (wishful thinking!).
These are all have a strong presence here in San Francisco.
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Justin Bedecarré is a Real Estate Advisor at Cushman & Wakefield, one of the leading commercial real estate firms covering the Bay Area. Justin has represented firms from Fortune 100 to startups in media and technology, including Thomson Reuters, Rhapsody, Bank of America, Looksmart, AKQA and Hearst Corporation, to name a few.
He co-founded the prominent real estate blog Bay Area Commercial Real Estate Blog and can be reached on Twitter, Facebook, LinkedIn and Quora. He majored in economics and political science at the University of California, Berkeley.