{"id":1004592008,"date":"2022-07-26T02:35:19","date_gmt":"2022-07-26T10:35:19","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004592008"},"modified":"2022-12-09T00:10:13","modified_gmt":"2022-12-09T08:10:13","slug":"top-5-california-markets-for-office-construction","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/top-5-california-markets-for-office-construction\/","title":{"rendered":"Top 5 California Markets for Office Construction"},"content":{"rendered":"

\"\"<\/a><\/p>\n

Following initial pandemic-induced woes, the office construction market has been finding its footing through the past year across all major U.S. markets. As of June, the U.S. office market saw roughly 151.1 million square feet of space under construction, with nearly 30 million square feet situated in the state of California, according to CommercialEdge<\/strong> data.<\/p>\n

California remains the most populous state in the country, but the Golden State lost residents during the past two years. In 2021, some 117,552 residents were deducted from California’s population total, according to the California Department of Finance. Some of the complex components behind this decrease include lower birth rates, COVID-19 deaths and falling immigration rates, while relocation also played a significant role.<\/p>\n

While companies return to work and reevaluate their long-term strategies, foot traffic in U.S. offices is up on a year-over-year basis, according to recent data from Placer.ai<\/em><\/strong>. In San Francisco, visits increased by 84.6 percent in June 2022, compared to the same period a year prior.<\/p>\n

The top 5 markets listed below make up for roughly 95 percent of the under-construction office space within the Golden State.<\/p>\n\n\n\n\n\n\n\n\n
Rank<\/strong><\/td>\nMarket Name<\/strong><\/td>\nTotal UC Sq Ft<\/strong><\/td>\n2021 Sq Ft Deliveries<\/strong><\/td>\n<\/tr>\n
1<\/td>\nBay Area<\/td>\n11,057,384<\/td>\n4,067,132<\/td>\n<\/tr>\n
2<\/td>\nSan Francisco<\/td>\n6,550,669<\/td>\n4,932,127<\/td>\n<\/tr>\n
3<\/td>\nLos Angeles<\/td>\n5,183,434<\/td>\n2,979,197<\/td>\n<\/tr>\n
4<\/td>\nSan Diego<\/td>\n3,596,771<\/td>\n1,374,789<\/td>\n<\/tr>\n
5<\/td>\nSacramento<\/td>\n1,838,600<\/td>\n1,332,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

5. Sacramento<\/h2>\n
\"\"<\/a>

Downtown Sacramento, Calif. Image courtesy of USFWS\/Steve Martarano via Wikimedia Commons<\/i><\/p><\/div>\n

The smallest market on the list, Sacramento has been gradually growing through the past cycle: in 2021, the metro area\u2019s population reached nearly 2.2 million, 1.5 percent more than in 2020. In June, the state capital had 1.8 million square feet of office space under construction, while in 2021, more than 1.3 million square feet of office space came online in the market.<\/p>\n

In February 2022, employment reached pre-pandemic levels and has been on the upswing. Unemployment has been constantly recovering as well, reaching 3.3 percent in April\u2014less than half of the rate recorded a year prior and outperforming pre-pandemic levels.<\/p>\n

The metro is also home to one of the largest office developments<\/a> currently under construction in California, namely Richards Boulevard Office Complex. Developed by the California Department of General Services<\/strong>, the four-building project is slated to encompass nearly 1.3 million square feet.<\/p>\n

4. San Diego<\/h2>\n
\"\"<\/a>

San Diego skyline. Image by Jill Wellington via Pixabay.com<\/i><\/p><\/div>\n

Due to the high concentration of life science jobs within the metro, San Diego was among the U.S. markets that actually saw office vacancy go down during the past two years\u2014along with Boston, the Bay Area and New Jersey. In June, the San Diego market had nearly 3.6 million square feet of office space underway, fourth in the state in terms of office construction.<\/p>\n

In 2021, the metro added 1.4 million square feet of office product to its stock. So far this year, San Diego is falling behind last year\u2019s numbers, with merely 157,263 square feet completed year-to-date through June.<\/p>\n

As mixed-use projects prove their resiliency and gain popularity among developers nationwide, downtown San Diego\u2019s first mixed-use tower<\/a> also moved forward in its development back in February. The $400 million, 37-story tower dubbed West Downtown San Diego is set to encompass 270,000 square feet of office space, 19,000 square feet of retail and 431 luxury apartments, with delivery set for early 2024.<\/p>\n

3. Los Angeles<\/h2>\n
\"\"<\/a>

Downtown Los Angeles skyline. Image courtesy of Adoramassey via Wikimedia Commons<\/i><\/p><\/div>\n

Los Angeles\u2019 office pipeline relative to existing stock was one of the lowest in the country in June, but the metro still had 5.2 million square feet of office space under construction. Last year, nearly 3 million square feet of space came online, while year-to-date through June already 2.2 million square feet delivered, outperforming last year\u2019s figures through the same interval.<\/p>\n

While L.A.\u2019s development has been slow in the past months, office investment activity<\/a> was one of the highest in the U.S. in the first five months of the year. Deals amounted to $1.9 billion, double the volume recorded within the same period last year.<\/p>\n

Creative offices represent a significant portion of the Los Angeles office pipeline. In May, the Legendary Group<\/strong> announced its newest venture in the metro, a 350,000-square-foot speculative creative office tower<\/a> to rise at 411 S Hewitt St, in the Art\u2019s District. Gensler<\/strong> is behind the design of the 17-story Class A building.<\/p>\n

2. San Francisco<\/h2>\n
\"\"<\/a>

San Francisco. Photo by Lili Popper via Unsplash<\/p><\/div>\n

The San Francisco-Peninsula metro had 6.6 million square feet of office space under construction, comprising 6.0 million square feet of rentable space. In 2021, 4.9 million square feet of office space was completed, while year-to-date through June nearly 2.3 million square feet came online.<\/p>\n

Foot traffic within San Francisco\u2019s offices has also increased year-over-year, but lags pre-pandemic levels, according to Placer.ai<\/em>. In June, foot traffic was 60.4 percent lower, compared to three years prior.<\/p>\n

In 2021, the San Francisco market saw nearly 3 million square feet delivered, while year-to-date through June already 2.2 million square feet had come online. Life science pockets, such as Mission Bay and South San Francisco have been hotspots for office development, due to the heightened interest in lab space since the onset of the pandemic.<\/p>\n

1. Bay Area<\/h2>\n
\"\"<\/a>

Bay Area. Image courtesy of Pixabay.com<\/p><\/div>\n

East and South San Francisco Bay\u2019s thriving office construction market is currently one of the best-performing in the country. The metro’s success is driven by its unmatched tech scene and thriving life science sector. Office vacancy is improving at a steadier pace than in the Peninsula and hit 15.3 percent at the end of May, down 320 basis points year-over-year. In June, Apple<\/strong> expanded its Silicon Valley footprint to a total of 800,000 square feet, committing to a newly constructed office campus<\/a> in Sunnyvale, Calif.<\/p>\n

In June, nearly 11.1 million square feet of office space was under construction within the Bay Area, nearly double the amount taking shape in San Francisco, the previous entry. In 2021, developers completed 4.1 million square feet of office product, while 1.3 million square feet came online year-to-date through June.<\/p>\n

In early 2022, STC Venture <\/strong>moved into the final phase of development of Cityline Sunnyvale, a mixed-use, multi-phase project in downtown Sunnyvale, Calif. Construction broke ground<\/a> on the third stage of the project, comprising two office buildings and a residential tower. Upon completion, the large-scale development is set to comprise 1 million square feet of office space.<\/p>\n","protected":false},"excerpt":{"rendered":"

Here are the best-performing metros for office construction within the Golden State, based on CommercialEdge data.<\/p>\n","protected":false},"author":739,"featured_media":1004592010,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21782,41288,1594,21742,21747,36080,1608,1609,51037],"tags":[39329,50674],"class_list":["post-1004592008","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-development","category-rc-listicles","category-los-angeles","category-latest","category-office","category-sacramento","category-san-diego","category-san-francisco","category-trends","tag-topofthelist","tag-commercialedge"],"acf":[],"yoast_head":"\nTop 5 California Markets for Office Construction<\/title>\n<meta name=\"description\" content=\"Take a look at the top California office markets where office 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