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Securing Sought-After Space at the Right Price: Lessons from San Francisco’s Commercial Real Estate Moves

Businesses are increasingly looking to shed outdated and stiff traditional office space for more welcoming, interesting spaces with modern amenities – both to better reflect their company culture and to lure remote workers back to the office. And they are finding that the timing is right to not only secure desirable new space in up-and-coming districts, but to do so for extremely favorable rates – often better than the rates they are paying in their current space.

San Francisco is a prime example. While the city has some of the highest commercial vacancy rates in the country – 30.4% in the third quarter of 2023, with direct vacancy at 18.5M SF and sublease vacancy of 7.5M SF – businesses in the city are still looking to expand and relocate. But there’s a new emphasis on quality – in location, space, and amenities.

San Francisco’s Jackson Square has become a hotspot for businesses looking to be part of an up-and-coming scene with a neighborhood feel. A recent story in the San Francisco Chronicle addressed the growing trend of companies – from law firms, to tech companies, to venture capital firms – moving from the downtown financial district to claim unique office space in and around Jackson Square that better reflects their company culture, provides unique amenities, and places them at the heart of this increasingly vibrant scene.

Boutique law firm BraunHagey & Borden LLP (BHB) worked with Cale Miller of Hughes Marino to secure a unique 22,000-square-foot creative law firm space at 747 Front Street that includes a ground floor entrance with a locally beloved coffeehouse, Andytown Coffee Roasters, an adjacent park, and a penthouse with views of the San Francisco Bay. The space is nearly triple that of the firm’s former office space in the financial district, reflecting BHB’s continued growth.

Noah Hagey, co-founder and managing partner at BraunHagey, told the Chronicle: “We always wanted a more informal, relaxed and functional environment, as opposed to a stiff and corporate, sterile high-rise ambiance.” The firm’s 50 attorneys are required to be on-site four or five days per week.

They are one of a number of businesses moving from the financial district to downtown San Francisco neighborhoods post-pandemic. Others highlighted in the story include crypto company Fintech Ripple, which signed a lease for a 124,500 SF building on Battery Street last spring, and VC firm Bain Capital which is taking over a 28,000 SF building on Pacific Avenue.

The momentum is building. “BHB was interested not just in a great building and office space, but helping to energize this section of Jackson Square,” Miller said. “With the recent addition of several Michelin-star restaurants and the redevelopment of TransAmerica Tower nearby, this should be a homerun for everyone, including BHB’s neighbors.”

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