Asset Services Insights

and electronics manufacturing. New

opportunities in the tech field include

robotics, virtual reality, and

driverless cars.

“Research and

development as well

as life sciences are

critical to the Bay

Area economy, and

require specific real

estate expertise,

which Cushman &

Wakefield provides,”

said Sandra.

The Bay Area real estate market, fueled

by new development and innovative

tenant build-outs, requires specific

real estate professionals who truly

understand asset management and the

tools it takes to underwrite new projects

as well as operate buildings with critical

infrastructures and complicated

tenant use.

ECONOMIC CHALLENGES

Even with all of the Bay Area’s assets,

it’s important to note that three primary

issues will impact future growth if not

proactively addressed.

COST OF LIVING/HOUSING:

A fast-

growing population, regulatory issues,

scarcity and cost of land, and high

construction costs add up to a shortage

of housing. A pipeline of 23,000 multi-

family housing units are now under

construction, with another 81,000

proposed, but the new supply will still

not meet anticipated demand.

MASS TRANSIT WOES:

The area’s

highways are at overcapacity. People

rely on buses, subways, ferries, or the

light rail system to get around—as well

as planes, bikes, cars, and carpooling—

however, the area’s rail and bus options

are not completely integrated, and are

overwhelmed. Expansions and a high-

speed light rail are proposed, but are yet

to become reality.

BAY AREA SNAPSHOT

Northern California’s Bay Area

encompasses the cities and

metropolitan areas of San Francisco,

Silicon Valley/San Jose, and Oakland,

along with smaller urban and rural areas.

It’s home to some of the world’s finest

wine country, waterfront towns, and

dramatic beaches, as well as world-

leading innovation and industry. Drive

the Bay Area loop and you’ll experience

lively cities, Napa and Sonoma, the

techy zeitgeist of Silicon Valley, some

of the best restaurants in the country,

towering redwoods, rugged coastal

hills, lush agricultural regions, and inland

waterways. Well-known professional

sports teams entertain Bay Area

residents including the San Francisco

Giants and the Oakland A’s (baseball),

the Golden State Warriors and the

Sacramento Kings (basketball), the San

Jose Sharks (ice hockey), and the San

Francisco 49ers and Oakland Raiders

(football).

Approximately 8.7 million people call the

nine-county region home, an increase

of 6.6% since 2010. The Bay Area is the

second-largest region by population in

California, after the Greater Los Angeles

area. It is expected to remain one of the

fastest-growing regions in the U.S. over

the next decade, thanks to the plethora

of jobs as well as the abundant natural

attractions and the benefits of

urban living.

BAY AREA ECONOMY

AND EMPLOYMENT

The San Francisco Bay Area is a

magnet for professionals, with strong

employment growth over the last 26

quarters. In recent months, Bay Area job

growth has begun to flatten, but this is

following several years of staggering

employment gains, and this metric

remains at historical highs. With a total

labor force surpassing 4.1 million, the

Bay Area employs more than 3.9 million

of its residents; its unemployment rate

in 2Q 2016 matched last year’s rate of

4.2%. The national average is 4.9%. Many

companies continue to expand business

across the region.

Professional and business services

employ the most people in the Bay Area,

followed by educational and health

services, government jobs, leisure and

hospitality, retail trade, and computer

HOMELESSNESS:

The Bay Area, and San

Francisco in particular, has a homeless

epidemic with no clear-cut solution,

although multiple public and private

resources have been trying to find

one for decades. This is a subject of

discussion for everyone in the Bay Area,

from executives in board rooms to tech

workers to tourists.

EDUCATION

Most people are familiar with Stanford,

University of California-Berkeley,

University of California-San Francisco,

Santa Clara, and University of California-

Davis, but there nearly 100 other options

for students. The Bay Area offers

private and public institutions, research

universities, and liberal arts colleges.

Schools work hard to compete for the

brightest high school students—and

keeping them in-state later creates a

brainy workforce for area companies.

According to the 2015 census, 42.4% of

Bay Area residents have Bachelor’s or

graduate degrees. In San Francisco, 53%

hold Bachelor’s or graduate degrees.

With more than 7,000 college-degree-

holders per square mile, San Francisco

has the densest clusters of educated

workers in the entire U.S.

Note: Any local will tell you that “The

Big Game”—a battle between UC-

Berkley’s Golden Bear mascot and the

“tree” from the “Farm” at Stanford

creates a fierce rivalry.

OTHER:

construction; financial activities; information;

wholesale trade, other services; transportation,

wholesale, and utilities; durable and nondurable goods;

mining and logging.

ECONOMIC DIVERSITY

23%

PROFESSIONAL

AND BUSINESS

SERVICES

16%

GOVERNMENT

12%

RETAIL TRADE

COMPUTER AND

ELECTRONICS

MANUFACTURING

OTHER

15%

LEISURE AND

HOSPITALITY

20%

EDUCATION AND

HEALTH SERVICES