Tech Companies Scooping Up Commercial Properties In San Francisco's Financial District
SAN FRANCISCO (CBS SF) — It's not exactly a takeover but in San Francisco's Financial District, bankers, lawyers and insurance executives are increasingly rubbing shoulders with workers from the tech industry.
The San Francisco Chronicle reported on Monday that of the eight office buildings under construction in the city, 100 percent of the space has been pre-leased to technology companies like Uber, LinkedIn, Salesforce and others.
Buildings that have for years housed workers for these more traditional industries are now filling up with app developers, coders and social media managers.
Kenneth Rosen, a University of California-Berkeley business professor, told the Chronicle that financial and legal firms are contracting while tech continues to expand.
"The tech guys can pay the most. They can't find what they are looking for South of Market, so they are more open to traditional office towers," he said.
Since 2010, the amount of space that tech companies occupy in San Francisco towers over 12 stories has more than doubled to 7.2 million square feet, according to the commercial real estate brokerage CBRE.
Opting out of a Silicon Valley-style campus in Mission Bay, Salesforce signed a lease for all the space at 350 Mission St., currently under construction, as well as 50 Fremont St. and the Transbay Tower—now known as Salesforce Tower. In November, the company also agreed to buy 50 Fremont for $640 million.
Google is also making the move downtown, taking 250,000 square feet at One Market St., and buying 188 The Embarcadero—an 85,000-square-foot building.
The open culture of many tech companies is influencing how the inside of these buildings are being designed. Window offices, once used for those at the top of the corporate ladder have been converted to open lounge areas.
Meade Boutwell, senior vice president at CBRE said that traditional law firms are moving into smaller offices as rents are beginning to double.
"In 2000, we saw the traditional businesses rise right alongside the tech businesses. That is not the case this time. Very few of those firms are growing," Boutwell said.
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