San Mateo, Poised for Office Boom

It’s sort of the opposite of the toothpaste squeeze effect – that phenomenon where pressure in the center of a tube pushes paste to the opposite ends. So, imagine San Francisco/Mid-Peninsula/South Bay as a tube where forces are being squeezed out of both the top and bottom of those poles.

In our case, the forces are high-value and expanding companies. As commercial space dries up in both Silicon Valley and San Francisco, San Mateo County is becoming a hot-bed for growing firms that seek new offices.

The numbers speak for themselves. A recent report shows that rental rates for offices in San Mateo County are commanding $3.73 per square foot. That’s a jump from the $2.70 average only four years ago. Meanwhile, office vacancy rates have declined more than 17 percent to 13.8 percent.

As the county sees more hot companies the likes of GoPro, Inc and SolarCity along with entrepreneurs such as Tim Draper and Elon Musk, who have large footprints in the mid-Peninsula, the next big region for innovation is on the rise.

Some other statistics that show the county is poised for big business gains: (Source: SAMCEDA, July Economic Industry Overview)

  • Between May 2014 and June 2014, the total number of jobs in the counties of Marin, San Francisco and San Mateo rose by 10,600 jobs to reach 1,107,200.
  • 22 of the top 100 fastest growing private companies headquartered in Silicon Valley are located in San Mateo County.
  • 13 of the top 25 largest software companies in the Bay Area are headquartered in San Mateo County.
  • 19 of the top 25 largest venture capital firms (ranked by revenue) in the Bay Area are located in San Mateo County
  • 10 of the top 25 largest private equity firms (ranked by total capital under management) in the Bay Area have offices in San Mateo County.

That inverse toothpaste squeeze effect shows little sign of abating. San Francisco is approaching its Prop M limit on new office buildings and development costs in Silicon Valley continue to spiral out of the stratosphere. Stay tuned for the next hub of economic innovation and growth.