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Co-working space costs nearly 15% more than office space, study says. Is it worth it?

More than 1.7 million people will work in co-working spaces by the end of 2018, according to the Global Coworking Survey, and a staggering 29 percent of such spaces were opened over the last year.

Growth of this new workplace trend is most impressive in San Francisco, the city of seemingly infinite startups, many of which aren’t large enough to warrant an office space, but too big for the CEO’s living room.

San Francisco has 51.45 co-working spaces for every 100,000 people — more than any other city in the country — according to a new survey from business development tool SimpleTexting. The study compiled data from Yelp, the U.S. Census Bureau and multiple office-space rental websites.

The cost of co-working space for a single employee is actually more expensive than traditional office space, by about $400 a year in San Francisco, the study found. A years-long co-working pass in the city is about $4,572, compared to $4,200 in an office. Nationally, co-working rent costs an average 14.8 percent more per employee than traditional office space.

 

 

 

Read more on SF Gate

 

 

Sinking Millennium Tower’s window cracks, SF seeks answers about safety

The sinking Millennium Tower in San Francisco has another problem.

A cracked window on the 36th floor that’s prompted San Francisco officials to issue a citation requiring building engineers to report on the condition of the glass panel.

The window cracked early Sunday morning.

“At this time, we do not know what caused this fracture, though it appears to be limited to this one specific unit,” Bill Strawn, spokesman for the San Francisco Department of Building Inspection, said in a statement.

The 58-story residential tower has sunk more than 17 inches since it opened in 2009.

 

 

Full article on SFGate

 

 

 

 

Mid-Market scares off tenants at SF’s big empty mall

6×6 still a zero for actual stores.

The towering, five-story, 250,000-square-foot mall at 950 Market Street dubbed 6×6 finished construction in 2016 after years of development, only to then sit completely empty without a single retail tenant.

Building staff keeps an eye on the place every day, but it’s something of a surreal spectacle as they’re the only people ever in the looming structure, which quickly developed a somewhat creepy vibe.

In November 2017, a source involved with the project told Curbed SF that the building was finally seeing some leasing activity and predicted two big tenants by year’s end. But presently the only activity there is a parking lot in the basement.

In March of 2018, as part of a bid to convert much of the interior space to office use, lawyer Daniel A. Frattin wrote to the San Francisco Planning Commission on behalf of building management and blamed high costs and Amazon influence for the state of the five-story fiasco.

 

 

 

Read more on Curbed SF

 

 

 

WeWork brings its newest office model to San Francisco to chase mid-size companies

WeWork is putting a twist on its co-working model with HQ, a new concept aimed at medium-sized companies that offers more privacy.

Co-working space operator WeWork is bringing a new concept aimed at medium-sized companies to San Francisco.

The fast-growing company eased 17,500 square feet in 800 Market St. for its first location of the new model, known as HQ, outside of New York City.

WeWork’s HQ is geared toward businesses with 11 to 250 employees that need office space, but don’t want to sign a traditional lease or don’t need the common areas the company provides in its co-working location.

“Since launching HQ By WeWork, we have been inundated with inquiries from businesses looking for private, flexible, cost-efficient spaces that allow them to reflect their identity,” said David Fano, the company’s chief growth officer, in a statement. “San Francisco was the obvious next destination.”

The company already runs six HQ locations in New York totaling more than 400,000 square feet, with the goal of reaching 1 million square feet within the next year.

Read more on San Francisco Business Times

 

 

How Salesforce Transit Center helped transform a blighted neighborhood

At the start of the economic recovery, San Francisco’s Transbay District was speckled with underused parking lots and very few options for housing and offices.

Now, the neighborhood holds the city’s largest office and mixed-use towers, residential high-rises and 100K SF of retail at the $2.4B Salesforce Transit Center that will soon open.

“Salesforce Transit Center has become a reality that generated a building boom in that area,” Transbay Joint Powers Authority Executive Director Mark Zabaneh said. “The minute the developers saw the transit center under construction, they started developing the parcels.”

The Aug. 11 opening of the transit center’s rooftop park, Salesforce Park, marks the end of the center’s initial transformation. The bus terminal will open to full operations on Aug. 12.

“It’s going to be a really significant achievement that surpassed expectations,” Zabaneh said. “The park is a big attraction. There is very limited quality public space and the park provides 5.4 acres of really quality public space.”

He said there has been a lot of enthusiasm for the rooftop park and the most-asked question has been about the park’s opening date.

 

 

Read more on Bisnow SF

 

 

 

 

 

Square Inc. expands Mid-Market headquarters office in one of San Francisco’s biggest office leases this year

Payments processing company Square Inc. added another 104,135 square feet to its Mid-Market headquarters in San Francisco.

The company will now occupy a total of 469,056 square feet in 1455 Market St., a 1 million-square-foot office building.

The deal was one of the largest of the second quarter for landlord Hudson Pacific Properties (NYSE: HPP), which reported earnings Wednesday.

“We had a strong second quarter, particularly in terms of leasing,” said Victor Coleman, Hudson Pacific Properties’ chairman and CEO, in a statement. “Already standout West Coast market fundamentals continued to improve.”

Twitter co-founder Jack Dorsey started Square in 2009 with 10 employees. The company’s technology enables business owners to process credit card payments and makes a credit card reader for cell phones. The company reported revenue of $809 million in 2017 and now has about 2,300 employees in San Francisco, Canada, Japan, Australia, Ireland, and the United Kingdom.

Square first moved into 150,000 square feet in 1455 Market in 2012 with plans to expand into 327,423 square feet over time. The company was among a wave of tech companies that flooded into Mid-Market during a revitalization of the area that is still in process.

Read more on San Francisco Business Times

 

 

Should California’s Costa-Hawkins rent control act be repealed?

Debating the pros and cons of rent control at the Urban Land Institute

The Urban Land Institute of San Francisco held a public forum at the Google Community Space Tuesday night debating Proposition 10, the November ballot initiative that would repeal the 1995 Costa-Hawkins Act and allow California cities to potentially expand their rent-control ordinances.

Arguing in favor of Proposition 10 and potential rent-control expansion was Amy Schur, the director of the Alliance of Californians for Community Empowerment.

John Eudy, co-chair of the “no” campaign Californians for Responsible Housing (and also a vice president at Essex Property Trust) argued against repeal.

David Garcia, a policy director at UC Berkeley’s Terner Center For Housing Innovation, appeared as a third-way party; however, since Garcia appeared to nominally oppose Costa-Hawkins repeal, he often functioned as a second anti-Proposition 10 voice.

All three parties agreed that the state’s goal should be more housing production. They also agreed that Costa-Hawkins as it exists now is ineffectual at protecting renters and that the status quo won’t do in the future.

 

 

Read more on Curbed SF

 

 

Embarcadero Center kicks off office renovations

Embarcadero Center is getting a facelift.

In the coming weeks, the center’s owner Boston Properties will start renovations to build new lobbies on the second floors of 1,2, and 3 Embarcadero, while the lobby in 4 Embarcadero Center will be redesigned.

The new lobbies — about 2,000 square feet each — will make it easier for tenants and visitors to find where they’re going and encourage meetups, said Doug Zucker, principal in charge of the project for architecture firm Gensler.

They will also provide a layer of security to office buildings that, in their current form, can be accessed by anyone from the elevator bank.

“We’re looking at how to create an entry experience for these office buildings that are buried on the second floor of a retail center,” Doug Zucker said.

Although the Embarcadero towers have cut across the Financial District skyline since their construction began in the 1970’s, accessing offices from the retail portion of the center can be confusing. To change that, the escalator and stairs between the second and third floor will be removed, leading people directly up to the new lobby spaces from the ground floor.

 

 

Read more on San Francisco Business Times

 

 

 

San Francisco delays decision on retail-to-office conversions

The owners of 220 Post St. spent $75 million to buy the Union Square property in 2016. The goal: to attract a luxury tenant to the five-story building. Too bad few of those exist.

City Center Realty Partners shelled out nearly $75 million for Union Square’s 220 Post St., the former Saks Fifth Avenue Men’s Store, with the goal of attracting a luxury tenant to the five-story space. That goal has been more difficult than expected.

Nearly as difficult for the owners has been convincing city planners that retailers are no longer interested in space above the ground floor.

Seven proposals to convert upper-level retail into office space have been filed with the San Francisco Planning Department, including 220 Post’s. Most of those properties are in Union Square. Earlier this year, the city decided to freeze those applications for 18 months. That meant that 220 Post, which was supposed to be heard by the planning commission this month, is waiting indefinitely for a decision pending the creation of permanent rules.

What’s at stake is the future of the city’s retail heart. City officials are hesitant to give up the sales tax revenue and jobs that retail generates, but landlords say empty space accomplishes nothing. Instead, landlords argue that adding more office space would not only help them fill buildings, but alleviate the extreme shortage of office space that is sending small businesses and nonprofits to Oakland.

San Francisco’s Board of Supervisors unanimously approved a resolution by District 3 Supervisor Aaron Peskin in May that imposed temporary rules banning conversions for an 18-month period. Planning Department spokesperson Gina Simi said the department has postponed hearings for properties located within the city’s downtown retail area.

The controls don’t apply to properties located south of Market Street or for applications that have already been approved, such as the former Macy’s Men’s store.

 

 

Read more on San Francisco Business Times

 

 

The era of big leases is over as San Francisco awaits next crop of towers

The era of massive office leases — including the likes of Salesforce, Dropbox and Facebook — is coming to a halt now that most of San Francisco’s pipeline of new office buildings is spoken for. Robust demand for office space has filled up buildings months or years ahead of completion, but development is drying up.

In May, another company declared it had signed the “biggest office lease ever” in San Francisco. The trend of going bigger and bigger started with Salesforce taking 714,000 square feet in Salesforce Tower at 415 Mission St. in 2014 followed by Dropbox taking 736,000 square feet in 2017 in the Exchange in Mission Bay. Then Facebook topped both with a deal to gobble up the entire, 750,000-square-foot Park Tower.

But, the era of massive office leases is coming to a halt — at least for the next few years — now that most of San Francisco’s pipeline of new office buildings is spoken for. Robust demand for office space has filled up buildings months or years ahead of completion, but development is drying up.

Some industry insiders say more building would be going on if it weren’t for Proposition M, a 1986 voter-approved law that limits how much office space can be approved in a given year. Still, others say that factors such as the lengthy city approval process and availability of development sites has also put the brakes on office development.

 

 

Read more on San Francisco Business Times