Cassidy Turley, a real estate services firm, explored the coming commercial real estate market trends in the Bay Area for 2014, and reviewed those from 2013, at an event held in San Francisco.
Greg Moss, regional managing principal of Cassidy Turley’s western region, gave his insights.
One of the first things he discussed was Generation Y, meaning those born between the approximate dates of 1982 and the early 2000s.
“The growth of Gen Y could be the single most dominant trend for commercial real estate,” he said.
Generation Y has a different lifestyle from older generations, and that could reshape the future of commercial real estate, he said.
“This generation will be more urban, drive less, and be more mobile. So from rental housing to collective office space to same-day delivery, Gen Y would be a noticeable force to shape commercial real estate,” he said.
Moss also suggested that the commercial real estate industry look ahead to the new lifestyle boom 3.0, since the tech boom 2.0 is already passé. He said, “We’ve entered into Lifestyle Boom 3.0.”
The Bay Area is already ahead of the game, as the technologies developed in the Silicon Valley have been changing every aspect of our lives.
He listed Google Glass, Smartwatch, driverless cars, super fast technology, bionic body parts, 3-D printers, and clothing nanotechnology, all of which are already moving forward in the Bay Area.
“These trends are fueling one of the strongest markets in the U.S., and especially good for us here in the Bay Area,” he said.
Looking back at 2013, Moss said it had been an incredible year for the Bay Area. Despite the nation’s uncertainty in terms of economy, the Bay Area is regaining its strength and continues to thrive.
He listed some numbers that represent the success of the Bay Area and the commercial real estate industry in the Bay.
In 2013, nearly half of the nation’s total 27 billion dollars of venture capital flowed into the Bay Area. And this money will bring new blood to the area because companies are using it to “hire and attract the best talent available,” he said.
Moss also mentioned that they tracked the great performances of initial public offerings in the area. “In 2013, we tracked 220 IPOs that raised more than $55 billion.”
Commercial real estate, Moss said, would benefit greatly from this surge. He said this growth “translated to 1.6 million square feet of occupancy growth last year in the Bay Area alone.”
Some may question how long this boom can last. Moss believes that it has staying power because it is driven by the most profitable companies in the world. These companies continue to innovate every part of people’s lifestyles.
Investors’ interests also show San Francisco’s potential. Moss noted that in early January, the Association of Foreign Investors ranked San Francisco as the third favorite city for foreign capital investment, preceded only by London and New York.