Checking on the commercial RE market in San Francisco shows a primary market dealing with the ever-shifting realities of tech and traditional economics. Whole swathes of the near-downtown area have struggled with vacancies and neighborhood perception problems, in some cases reaching far beyond the downturn of ’07-’08.
But when a market is blessed with lots of technology companies, growth remains the watchword. In Vauhini Vara’s April 14th WSJ piece titled Market Street Looks For Twitter Revival, expectations are high concerning the relocation of social media tech company Twitter’s headquarters into a Market Street property that has lain dormant for years.
Picking up the story from where the excellent Bay Area Commercial Real Estate Blog left it last month, WSJ noted the elements that went into the deal, including a six-year payroll tax exemption:
While local business owners await Twitter’s arrival, that hoped-for rebound has yet to materialize. With crime and homelessness still rampant and storefronts boarded up, pedestrians remain wary of venturing too far west of the downtown shopping hub around the Westfield San Francisco Centre, a mall on Market between Fourth and Fifth Streets.
Yet the news of Twitter’s planned move to an enormous, nearly vacant building between Ninth and 10th Streets, long known as the San Francisco Mart, has energized city officials and small businesses working to improve the stretch of Market Street between Fifth and 10th Streets. The organizer of the Burning Man Festival, Black Rock Arts Foundation, also recently announced it would move to this part of Market.
Mr. Stender, who co-founded Huckleberry Bicycles with two friends, said they “recognized the potential of mid-Market” but Twitter’s move “will help it along much more than we could.”
Coming at around the same time are a spate of San Francisco tech business commercial property deals that point to sunnier days ahead for the city by the bay:
Zynga revived a development that had long sat vacant in Showplace Square. The biggest deal in 5 years when they signed.
Salesforce put their stake in the ground in Mission Bay, set to build their global headquarters in the storied and somewhat troubled development in Mission Bay. Add 5,000 workers to stay in the city and a huge lift to the Mission Bay.
Now Twitter is one step closer to reviving a large development at 1355 Market Street, and an entire submarket may benefit in the process. The Civic Center now won’t just be home to lawyers, judges, city gov employees and a generous sampling of SF’s more eclectic denizens. Twitter and its ostensible followers (so wish all the building owners and city officials) may just be the catalyst to revive another run down SF market.
Cheers to the city for getting this done. Hopefully the tax breaks won’t end with the big guns. The city is thriving because of the huge number of startups setting up shop here, and the more loyalty these founding teams have for the city, the more likely they will want to revive a market when their time comes.
Boom times? Maybe not exactly. But the signs are unmistakable that San Francisco’s commercial property market still has some treats left in the portfolio.