Commercial Real Estate Overview – San Francisco

The San Francisco Commercial Real Estate Marketplace is diverse, dynamic and complex.  While the City and County of San Francisco is confined to an area of only 49 square miles, the Commercial Real Estate Market is divided into multiple submarkets consisting of dizzying layers of zoning laws, height limits, and special use districts.  These zoning laws not only dictate development projects, but determine what types of businesses can go where.  Therefore, it is critical to understand where your business can go, before you get your heart set on operating your industrial manufacturing plant in Jackson Square.  Obtaining brokerage services, like those offered at Calco Commercial Real Estate, can help any entrepreneur, expanding or relocating business, decipher the zoning code and develop an effective tenancy strategy.


Like-kind commercial real estate in San Francisco tends to be clustered together.  For instance the Bayshore/Bayview, and India Basin submarkets tend to be heavy industrial in nature, thereby housing the majority of warehouse in the City.  Conversely, the Financial District primarily offers office and retail space.  There are Mixed-Use Districts located in various neighborhoods such as the South of Market Area (SOMA), Potrero Hill/Dogpatch and Mission District.  However, just when you think your use might be perfect for a specific neighborhood, an individual building may be designated as a “historical landmark,” with a host of other uses/restrictions.  Once again, retaining a commercial real estate broker specializing in the San Francisco market can help determine the best location for your specific business.


Once a few neighborhoods/zones have been identified for the ideal location of your business, it is next critical to note that not all commercial real estate is priced equally in San Francisco.  Two buildings similar in construction, amenities and condition will vary greatly in price depending on the neighborhood (much like the residential market).  When it comes to pricing, it’s best to remember the old cliché about the three most important factors of real estate:  location, location & location.  While location is not the only factor affecting price, it is a key component.  Other elements that affect commercial real estate pricing in San Francisco include:  condition, parking availability, close proximity to public transit, amenities, absorption & vacancy rates, ADA and seismic compliance, etc. 


As a Tenant, it is imperative to hire a commercial real estate broker who can help negotiate a fair price, improvement packages, and early occupancy opportunities.  Another huge advantage for Tenants: typically the Landlord pays for any commissions earned by a lease transaction.  Therefore, a Tenant can utilize a broker with little to no financial responsibility.  Lastly, seasoned brokerage firms, such as Calco Commercial, have a direct pulse to the marketplace and understanding of available properties and even off-market opportunities.   As a Landlord, using a brokerage firm can streamline the leasing process, lower vacancy periods, increase visibility, and ultimately create higher revenue streams for commercial property assets.   And, Landlord’s only pay commissions on completed transactions!  So, as a Landlord, why not let a broker professionally market a space and complete all the leg work on your behalf?  The San Francisco commercial real estate marketplace can be a daunting place to enter, but Calco Commercial can simplify the process while offering definitive results. 


For more in depth market information, contact the Calco Commercial office at 415.970.0000.