The San Francisco Chronicle reports that during the third quarter the price for office space in the city pushed past the previous peak reached during the dot-com boom in 2000. The new number is $81.25 per square foot as measured in the third quarter, according to brokerage firm Cushman & Wakefield. The old record was $80.16 per square foot and was notched in the fourth quarter of 2000.
In less than a decade, San Francisco startups including Uber, Twitter and Airbnb have grown into enormous companies worth billions of dollars, and leased millions of square feet of new office space. Salesforce became the city’s largest private employer as it snapped up office towers downtown. At the same time, some of the world’s largest tech companies have expanded from Silicon Valley into San Francisco, pushing rents up ever further.
The city’s average Class A asking rent —for leases in the newest and highest-quality buildings, the typical barometer for the health of the office market — has risen 124.1 percent since 2010, according to brokerage JLL.
“You’ve got real businesses that are operating, in some cases, with billions of dollars in cash flow,” said Steve Anderson, managing director at JLL. “That was not the case in the dot-com era. Almost none of those companies were making money — that’s why it went up in smoke.”
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