March 28, 2016
If past downturns are any indicator, the San Francisco CRE market is headed for a slowdown. Real estate researchers tracking the office subleasing market say it’s at a level not seen since 2010, and involves companies such as Twitter, Intuit, and Zenefits.
Available sublease space in the city jumped to 1.9 million square feet in February, a 46 percent increase from the end of the third quarter, according to Cushman & Wakefield. The largest share of space on the market is from companies that are contracting or consolidating, including about 55 percent in the technology industry.
Real estate economist Kenneth Rosen predicts the market is beginning to enter a “correction process” that will “take several years to play out.” Rosen says the extra space is a warning sign that the “growth rate for some companies is unsustainable.”