Thursday, May 21, 2015

A New Record in San Francisco Real Estate Madness: $168 per Square Foot

A friend in the  real estate business informs me that 2,000 square feet of office space in the South Park section of San Francisco just went on the market with an asking rental price of $168 per square foot. Note: Prices on the West Coast are calculated differently then on the East Coast. West Coast prices are quoted on an annual basis, East Coast on a monthly basis. A West Coast $168 per square foot works out to $14 per square foot in terms of an East Coast quote. However, regardless of how you quote it, it still comes out to a rental rate of $28,000 per month rent for only 2,000 square feet.

I have long said the closer you get to a Fed money spigot, the crazier the goings on are. South Park is very near the Cal Train station that takes San Francisco passengers to the center of a the ultimate Fed spigot, Silicon Valley.

Moscone Center, San Francisco's main convention facility, where many tech conventions are held, is only four blocks north. Google Ventures has offices in the area. But still $28,000 for 2,000 square feet?

My real estate friend says, no one  that needs to make money is going to rent that space. It will have to be someone financed with crazy venture capital money, who isn't making any money anyway and is just spending money as quickly as new rounds of financing come through the door.


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