Sun, June 14
Downtown Firms Moving to SOMA
By The initial impact COVID-19 had on the technology and startup office market
The initial impact COVID-19 had on the technology and startup office market was unexpected and unfortunate. Tenant rep brokers were showing their clients expansion space pre COVID and now are looking for smaller spaces or server storage. Given larger technology companies are having employees work from home until Q1 2021 the demand for startup office space has decreased significantly.
Traditionally professional firms and larger startup offices have been located in the financial District of San Francisco. SOMA traditionally has been home of emerging technology firms and the go to for startup office space as the older buildings having brick and timber, smaller footprints, and a less corporate feel making them a more desirable startup office space than their downtown competitors. As the Weeks drag on and shelter in place is being lifted in phases there are those who cannot wait to go back to their office and those who want anything but that. In response We have noticed an unprecedented spike in demand for startup office space in SOMA and the Mission. Initially we were under the impression the market is slowly coming back and firms are getting the funding they were hoping for. While that is not necessarily false is not the reason for the increased demand. The increased demand for startup office space is due to the Financial District firms advising their tenant rep brokers they want their own private building. In multitenant buildings like those downtown there is a large portion of each building used as common area, hallways, bathrooms, elevators, lobby’s, you name it. The firms pushing for the SOMA startup office are moving away to sharing amenities likely in response to COVID-19. With the threat of the virus harming your employees and jeopardizing your business in its key years of growth CEO’s have advised their tenant rep brokers they want to ditch the shared amenities and opt for their own private building.
The market for startup office space has always been a strong one that is unless we have a large event such as an earthquake or pandemic. In this case the startup office market in San Francisco will decrease in demand in the larger picture but as of this point it looks like there will continue to be a demand for smaller boutique startup office space.