_"It's the global epicentre of tech" – Mark Sullivan shares his insights into San Francisco
San Francisco and Silicon Valley have become synonymous with innovation and technology so, as you’d expect, the office market there is heavily dominated by tech companies. It is no doubt the global epicentre of tech.
What makes San Francisco so attractive to tech companies and employees?
A decade or two ago, tech companies were considered pretty geeky and not necessarily vibrant places to work. Today, it’s totally different.
Tech companies have become more diverse and exciting; they want to be in locations which reflect that and attract the best young talent.
The tech revolution started 30 miles south of San Francisco in a relatively small town known as Palo Alto; located adjacent to Stanford University, it became a hotbed of talent and innovation. This phenomenon spread outward towards San Francisco to create what we now know as Silicon Valley.
During the new tech revolution, there has been a big drive for Silicon Valley companies to open up offices in San Francisco to attract the new hipster and millennial generation of workers.
Downtown areas that were once avoided by more conventional companies have undergone a regeneration in recent years.
Converted warehouse developments alongside new build creative workspaces have reinvigorated areas such as SOMA, which is now an important ecosystem for established and upcoming tech companies.
SOMA now commands some of the highest rents in San Francisco, comparable to the traditional CBD area– an unthinkable prospect fifteen years ago!
What kind of challenges is San Francisco’s commercial market facing?
San Francisco has really transformed over recent years and is an essential location for tech companies that want to maintain a competitive edge – but this comes at a price. Both commercial and residential rents have been driven up across the city, making San Francisco one of the most expensive cities in the USA.
However, despite rising rents, San Francisco continues to attract business. Recent large deals include Facebook, Salesforce and LinkedIn, taking 400,000sqft-plus, 710,000sqft and 450,000sqft respectively.
The cost of attracting and retaining talent still far outweighs the associated real estate costs, so demand for space is set to continue as the tech market thrives.
"Work and play are no longer two totally separate concepts – work spaces reflect this. "
What is the typical San Francisco office like?
As more and more millennials join the workforce, employee requirements and expectations of their workplaces are changing. Work and play are no longer two totally separate concepts – successful employers recognise that the two must merge together in order to attract top talent and encourage productivity – and work spaces reflect this.
Tech companies tend to occupy modern, open-plan and characterful spaces that offer an array of services. These can include break-out areas, places to relax, table tennis, free meals, recording studios, gyms… I hear Google even has a clothes washing service!
How do you see the future unfolding?
The Greater Bay Area has experienced plenty of growth, but San Francisco doesn’t have endless space, and tech hubs are springing up in other areas throughout the USA. Cities such as Seattle, Portland, Los Angeles, Austin, Denver, Boston and Charlotte have established tech communities that are significantly cheaper than San Francisco.
Having said that, tech companies know that being in San Francisco gives them kudos, and the area is home to significant sources of venture capital that continues to drive tech start-ups and the general expansion of this sector.
And beyond the US? What’s happening there?
The success seen in San Francisco has undoubtedly inspired working spaces overseas. The collaborative working concept established by companies such as WeWork has been replicated across the globe. Access to a skilled workforce is still one of the primary drivers that dictates where tech firms tend to gravitate.
It is no coincidence that global cities such as London, Sydney, Amsterdam, Berlin and Paris have developed significant tech markets.
These places offer the amenities that are conducive to creating an environment where tech communities can thrive: good feeder universities, youth culture, entertainment centres, creative environments… they are cities where young creative talent are, or would want to be.
What advice would you offer any companies looking for office space on the West Coast?
To get in touch! Our West Coast teams are some of the best in the US and will certainly be able to help. Our Northern California business incorporates San Francisco and Silicon Valley, and is the strongest in the market.