July 10, 2017
By: Laura Tinetti, Senior Vice President, JLL
Look at any list of the most expensive places to live or work today and chances are San Francisco will appear on that list. The city’s rise as a tech and financial hub as well as a headquarters location is well documented and has driven it to a high level of global prominence. Earlier this year, we even listed San Francisco among our top 30 most dynamic cities in the world.
Photo credit: JLL
With success, comes a cost. Estimates suggest that the total cost of living in San Francisco is almost 63 percent higher than the U.S. average. Office rents are among the highest in the country, rivaling New York City. Housing costs are ‘through the roof.’ Average sales prices for homes in San Francisco are second only to those in Silicon Valley. Median rents for a two-bedroom apartment are more than $1,000 higher than equivalent housing in New York and almost double the rents paid by Los Angelenos.
Yet, not everything in the city by the bay is expensive. We recently compared emerging shopping neighborhoods (retail corridors) in several cities around the country and, perhaps surprisingly, no less than three San Francisco locales made our list of the most affordable for retailers from a rental cost perspective. They are: Hayes Valley, Fillmore and the Marina (Chestnut St.).
Shop rents in these three locales run from a high of around $115 per square foot in the Fillmore retail corridor to around $85 per square foot in the Marina. If this still sounds high, retail rents in Union Square, San Francisco’s premier retail district, are hovering around $700 per square foot.
So, why are rents in these three retail corridors still relatively affordable? According to Jeff Badstubner, SVP and JLL’s retail market lead in San Francisco, there are two main reasons.
“These are emerging retail corridors, so unlike established areas like Union Square, they are really only just starting to see national brands and larger retail players,” says Jeff. “Second, San Francisco’s unique ban on “formula retail” has applied a regulatory brake to retail development in many parts of the city,” he adds.
My experience spans the regional retail markets of the Bay Area and urban retail in San Francisco with listings in Union Square, the Financial District and premium high streets in San Francisco. I specialize in creative solutions for new concepts, delivering aggressive roll-outs across multiple markets, and am experienced in all aspects of site selection, multi-market expansion, strategic planning and retail store development for several of the nation’s leading chain retailers, resulting in high-volume, profitable stores.
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