Although Silicon Valley and San Francisco are often grouped into the Bay Area bubble, the differences between these two regions has been highlighted in a new CBRE report.
According to the Tech-30 report, which looks at the impact that the tech industry has on office space demand, found that San Francisco was at risk for growing sublease availability.
“The city of San Francisco contains the largest concentration of young startup and public companies that have been significantly affected by the pandemic-related shutdowns,” said Colin Yasukochi, executive director of CBRE’s Tech Insights Center. “San Francisco also faces social distancing headwinds in the near-term in its density and reliance on public transit and vertical office towers.”
About an hour south of the city, Silicon Valley saw a 11.6% growth in office rent over a two-year period that ended June 30.
The difference between the two regions is Silicon Valley’s submarkets are heavily influenced by major tech companies such as Alphabet, Apple and Facebook, which have stayed afloat throughout the pandemic.
Despite San Francisco’s struggling office market, the report expects that the city’s excess of top tech talent will help fuel incoming startups.
“The Covid-19-induced recession has released the pressure on both fronts, and we expect companies to take advantage of the opportunities created by increased office vacancy,” said Todd Husak, managing director leading CBRE’s Tech & Media Practice.