San Francisco Market Update: The Pipeline Is Thawing
With roughly 11.5 million square feet of office space slated for delivery this year—more than double 2020’s activity—Bay Area office completions are poised for a return to form.
As of March, the Bay Area had roughly 18.8 million square feet of office space underway, totaling 64 properties, CommercialEdge data shows. Of these, only two properties comprising 598,000 square feet had broken ground since February. Due to delays induced by the current global health crisis, 5.2 million square feet were delivered in 2020, the lowest level of construction activity since 2016 and a 60 percent decrease from the cycle-high activity of 2018, when 13.2 million square feet came online across 48 properties.
Nine properties, totaling 2 million square feet, came online by March, with the largest of these being Uber’s 1-million-square-foot Mission Bay campus in SoMa. The downward trend of the past four years is expected to change, as 47 assets are slated for delivery in 2021, totaling approximately 11.5 million square feet. Besides tech, life sciences are spearheading the activity in urban areas, with BioMed Realty, Healthpeak Properties and Kaiser Permanente set to finish construction of about 1.9 million square feet of health care assets across the South San Francisco, Brisbane and Redwood City submarkets. BioMed Realty also recently received approval for its 12-acre Emeryville Center of Innovation, which is expected to break ground next year.
Tech-centric development is still a major driver, as work-from-home conditions are expected to change soon. Adobe Systems is building a 1.3-million-square-foot, 18-floor office tower in San Jose’s CBD, while Google and Microsoft are developing about 1.2 million square feet in Mountain View.
The largest project under construction in the Bay is Oceanwide Holdings’ First Street Tower of Oceanwide Center, a 1.5-million-square-foot office tower situated in San Francisco’s South Financial District. The project is scheduled for a 2022 delivery and will be the city’s second-tallest such building. It is designed to meet LEED Platinum specifications upon completion.
CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here. We included properties of 25,000+ square feet in our research.
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