03:22 AM

Tech Firms Choosing San Francisco Over Palo Alto

The San Francisco Chronicle reports that tech firms have become a chief driver for office space in San Francisco.

Tech firms making S.F. new home

Many of the tenants are swelling homegrown businesses like Twitter, while others are relocating from Silicon Valley or outside the Bay Area. As of June 15, 83 technology companies were in the market, seeking 1.5 million square feet of space, up 51 percent since the financial crash in fall 2008, according to brokerage firm Jones Lang LaSalle, which regularly tracks the market.

Zynga, the social gaming company, is one of the largest companies looking for San Francisco office space, as much as 300,000 square feet. Twitter has expanded six times and is looking for about another 100,000 square feet.

The lure is low prices and engineering talent.

South of Market rents that are about half of Palo Alto's right now, the desire to cluster near success stories like Zynga and Twitter and the broader shift to the Web 2.0 world.


When David Sacks, chief executive of Yammer, asked his developers whether they should relocate the microblogging service for businesses to Palo Alto or San Francisco, the latter won hands down. This represents a distinct shift from a decade earlier when he was chief operating officer of PayPal in Palo Alto.

"There's a lot more engineering talent living in San Francisco now," he said. "The balance of power may have shifted."