Strong commercial real estate market lures national and international investors to San Francisco
April 11th, 2008San Francisco, April 9, 2008 — Despite current residential housing woes and the U.S. Labor Department reporting 80,000 job losses in March 2008 (nearly 250,000 for 2008), the global commercial real estate market still is holding strong, especially in San Francisco, Calif. According to commercial real estate investing expert, Cherif Medawar, the Bay Area’s technological growth, steady employment, and weak U.S. dollar are contributing factors to the area’s robust commercial real estate market.
“Export, employment, and retail sales growth have granted immunity to the Bay Area despite a grim economy,” says Cherif Medawar, founder of the Institute of Commercial Real Estate, and San Francisco local.
Figures released from the Bureau of Labor and Statistics credit the strength and growth of the Bay Area’s technological sector for the region’s employment growth. Industry leaders such as Cisco Systems, Google, Apple Inc., VMware, and several technology companies continued to drive economic growth and stimulate profitable commercial real estate activity in 2007.
Office and R&D markets in the Bay Area showed a net activity totaling more than $5.8 million for 2007. And the commercial real estate trend is forecasted to weather the national economic storm throughout 2008. The San Francisco Center for Economic Development substantiates those statistics in its 2007 commercial real estate update, citing 16 consecutive quarters of positive absorption, and sales of existing buildings remaining strong, with more than $6 billion in sales occurring in the first half of the year at prices exceeding $500 per square foot. In addition, occupancy rates showed continued growth.
“We’re at a historical time, and there’s so much international money coming into the Bay Area,” states Medawar. “Asia has exceptionally deep pockets, and China and Japan are ready to pour millions if not billions into U.S. commercial real estate — hotels, motels, office space, buildings, and retail. With so much positive international cash flow coming into the U.S. — specifically the Bay Area for its low real estate prices and low interest rates — the opportunity for San Francisco residents to make a ton of money right in their own backyard is almost unfathomable.”
Medawar adds, “Retailers spend more money per square foot in San Francisco than in any other area in the United Sates. The area is showing explosive tenant demand. And with guaranteed locked-in leases, it’s practically impossible not to get paid. People are lining up to invest, especially international investors who are focused on commercial transactions.”
Encouraging future commercial future growth and profits, San Francisco will see more than 3 million square feet of new office space coming onto the market between 2008 and 2011, which marks the largest increase in new office space in San Francisco since 1985. Even Wall Street is showing faith in the San Francisco market, speculating the area to sustain rents as high as $100 per square foot by 2009.“
Based on past and present economic performance, and given the current tenant demand that’s as much as a million square feet, investors can make a killing in San Francisco’s commercial real estate market,” adds Medawar. “There’s a healthy appetite on both ends of the spectrum — both tenants and investors. Rather than feeding into the fear frenzy, new or seasoned investors simply need to understand the facts and statistics that make the Bay Area a money-making oasis!”
The number of commercial transactions, sales volume, and average price paid per square foot in the San Francisco Bay Area has led Medawar to spawn his first free recession-proof commercial real estate investing workshop — all in an effort to help residents and investors of all levels understand the current recessive economy and how to help them protect their hard-earned dollars.
Medawar says, “The San Francisco Bay Area is a ‘global market’ poised to not only weather but also exceed the current economy at measurable levels. I want to help investors reposition residential assets and transition them into commercial properties that are recession-proof and generate long-term income without having to pay a penny in taxes. Using a 10310 Exchange, people in the Bay Area can learn how to build wealth and keep more of their money.”
Bay Area investors and residents interested in commercial real estate can register to attend one of Cherif Medawar’s free workshops scheduled from April 27 – April 30 at instituteofcommercialrealestate.com.
About Cherif Medawar: Cherif Medawar, founder of the Institute of Commercial Real Estate (ICRE), is a commercial real estate investor with more than 18 years experience and a multi-million-dollar generating portfolio of residential and commercial properties across the U.S. and the Caribbean.
Media Contact: Ashlee Jones
Business Manager, Institute of Commercial Real Estate
407-206-6577, ext. 11710