Bay Area Jobs And The Economy

[Animo]

Yea, but it seems awesome to be at that age and doing all those innovations.

[Animo]

Fueled by tech company growth, San Francisco office rents rose sharply in the second quarter and vacancies decreased, vaulting the city to the leading spot in an otherwise-tepid national office market, according to three separate research reports this week.

"San Francisco jumped to the No. 1 position in the country" for office real estate performance, said Colin Yasukochi, vice president of research at Jones Lang LaSalle and author of one of the reports. "Technology companies are the underlying driving force in the San Francisco market. It's recovering very quickly" from the economic downturn.

He shows the city's average asking office rent at $40.06 per square foot, up from $33.71 a year ago.

Over the past four quarters, about 1.3 million square feet of space was absorbed by tenants, "the best four quarters since 2008, which was the peak of the market," Yasukochi said. While the vacancy rate overall is still a relatively high 16.2 percent, in hot neighborhoods such as South of Market, it's only 6.9 percent, he said.

Chris Macke, senior real estate strategist for research firm CoStar Group in Washington, agreed that San Francisco is bouncing back.

"You folks have seen steady rental-rate increases for effectively every quarter since early 2010, whereas nationally they're still having rental-rate decreases," he said. "In the second quarter, San Francisco had the largest rental-rate increases, going up 4.4 percent compared to the first quarter. That's very, very strong, far better than anywhere else in the country."

Part of the dynamic is that San Francisco tends to be volatile, as supply is constrained for the most sought-after, higher-quality "creative" spaces. "It's a market that is prone to greater increases and decreases; it acts like a tightly wound rubber band," Macke said.

Bright outlook

The San Francisco metropolitan area, which includes San Mateo County, was also on top for rent increases between the first and second quarter in a report from research firm Reis.

"I think the outlook for San Francisco is relatively bright," said Ryan Severino, an economist at Reis. "We expect to see fairly robust rent growth there this year." Both Oakland and San Jose metro areas also are benefiting from increased office demand, Reis found. It ranked San Jose fourth in the nation for rent increases and the East Bay ninth.

Tech firms increasingly are branching out from SoMa into downtown, previously the domain of more traditional companies.

'The hustle and bustle'

"We like the hustle and bustle of the Financial District," said Alex Mehr, co-founder and co-CEO of online dating site Zoosk Inc., which signed a lease in the second quarter for 21,391 square feet at 475 Sansome St. It already was subletting the space from Yahoo.

"Software companies prefer SoMa because they hire a lot of Java developers who live in the South Bay and so (being near) Caltrain is an advantage," Mehr said. "But we're a Web company and our developers live in San Francisco, so the Financial District is a much easier commute for them."

Zoosk went from about 20 employees 18 months ago to almost 90 now. Mehr expects the staff to double annually, so the company will soon outgrow its current location. Rising rents don't concern him too much.

In the heart of the city

"The advantage of being in the heart of San Francisco with quick access to BART and having all that action all around us outweighs any increase in prices," he said.

Meade Boutwell, senior vice president with broker CB Richard Ellis, recently represented a downtown building that remodeled a 3,000-square-foot space specifically to lure tech tenants.

"The Mills Building at 220 Montgomery is one of the oldest buildings downtown, it's a classic that survived the 1906 earthquake," he said. "It's class B space with traditional dropped ceilings. We tore out the ceilings, exposed the raw concrete, brick and piping, which made it very creative-looking. The tech tenants that all wanted SoMa in 2000 said they loved the feeling of the space; we had nine offers." A tech company leased the space for $41 per square foot, a premium from its $35 asking price. Now the owner plans to do a similar rehab elsewhere in the building.

Executives at Starwood Property Trust, a real estate investment trust based in San Francisco, said they are bullish on the city.

"San Francisco has held up better than most markets," said Chris Tokarski, managing director and chief credit officer. "In particular the tech growth is creating more pressure and space is leasing up quicker. You can say that about apartments, retail and office. It clearly is seeing growth on all fronts."

E-mail Carolyn Said at csaid@sfchronicle.com.



Read more: http://www.sfgate.com/cgi-bin/articl...#ixzz1RaZOaqnR

[Animo]

For months, debate has raged about whether Silicon Valley has been experiencing another bubble that can't possibly be sustained. The frenzy is obvious: New figures from the National Venture Capital Association show more venture money poured into Internet startups last quarter -- $2.3 billion -- than in any period since the dot-com bubble, driven largely by investments in social media companies.

But even as investors race to find the next Facebook or Zynga, the celebration could be short-lived. Two recent surveys of venture capitalists and investment bankers -- the very people poised to grow rich off a new wave of tech stock offerings -- show them increasingly wary that the social sector is becoming too risky. And the stock market sell-offs that have buffeted the tech-heavy Nasdaq index this month sharpened those concerns.
"Those of us who lived through the dot-com bust are very leery about investing in social at these valuations," said Paul Santinelli, a venture capitalist at North Bridge Venture Partners, referring to the premium venture firms have been willing to pay to get into hot startups.

Consider the case of LinkedIn, whose initial public offering in May was one of the valley's biggest-ever for an Internet company and turbocharged the recent investment frenzy.

http://www.mercurynews.com/business/ci_18671416

[Animo]

The Hot Spot for the Rising Tech Generation

A bidding war broke out in November when a small house in San Francisco's tightly packed Noe Valley came on the market.

Twenty-two people, including employees of Facebook, Zynga, Google and Pixar, battled for the home. The winning offer was $1.5 million—40% higher than the asking price. The house had a great view, but it was only 1,800 square feet and came with an old kitchen which, like most of the interior, was covered in 1970s plywood paneling. Seen from the curb, there's hardly any house at all—just a one-car garage and gate leading to small front courtyard.

The inconspicuousness was part of the attraction, said Jasmin Arneja, 42, who bought the two-bedroom house with her husband Gagan, 40, a software engineer at a networking start-up. "It's the antithesis to these outrageous bizarre Gordon Gekko-esque houses. It just incorporates so much of our values," said Ms. Arneja, who runs a philanthropic advisory firm.

Housing prices in the San Francisco Bay area are once again soaring, thanks to an infusion of cash from the rising shares of Apple and Google and the initial public offerings by Zynga, LinkedIn, Yelp and soon Facebook, expected to be the largest in Internet history. But while a previous generation of dot-com executives opted for mansions in wealthy San Francisco neighborhoods like Pacific Heights and tony Silicon Valley suburbs like Atherton, this generation is gravitating to modest homes and condos in grittier parts of the city.

[Cal_Escapee]

Why Branch Is Moving Back To New York City
BY JOSH MILLER
ON MARCH 27, 2012

My co-founder likes to say, “Being a startup founder in San Francisco feels like being a banker in New York.” Our founding team of three started Branch, a conversation platform, six months ago in New York.

We spent the first few months bootstrapping our prototype from a co-working space in Lower Manhattan, until this January, when we packed our bags and moved to downtown San Francisco to work with Ev, Biz, and Jason at the Obvious Corporation. It has been a wonderful experience – we have encountered incredible people and product advice – but in a few weeks time, the company will be moving back to New York (bringing Jason Goldman with us).

In short, we think it is a better city to build our business in.

San Francisco is just too nice. The nature is too accessible, the architecture is too Victorian, and the weather is too perfect. The quality of life here is unrivaled. But I feel like I haven’t earned that yet. One day, I’ll bike across the bridge and meet my family at Mill Valley Beerworks.

For now, I miss the grit and grime of New York. It is real and raw, and the commotion of the city is contagious. Startup life is characterized by constant motion and tenacious tinkering, not hikes on Mt. Tam and brunch in the Mission, and the pace of life and breadth of humanity in New York is invigorating. I like to tell people: New York is like coffee. You know it’s not good for you, and you don’t really like the taste, but you just can’t get enough. The rush, the jitters, they’re addicting, as are startups.

And for whatever reason, be it its youth, modest size, or proximity to more established industries, the New York tech scene has more of a “let’s stick together” ethos about it. That is not a knock on San Francisco tech folk. They are equally compassionate and caring. But there are just so many startups here.

In New York, everybody knows each other and it is common practice to rally together, whether for a New York Tech Meetup, HackNY fundraiser, or a lively SOPA protest. Given the volatility of a startup’s life, this camaraderie is a comforting and invaluable resource for any New York founder.

Plus, the startup scene in New York feels like a movement. In San Francisco, tech is just what you do, what you have always done. Thus, the standard coffee question is: “What are you working on these days?” While in New York, the more applicable line of questioning is: “Where are you coming from? What did you do? What inspired you to drop everything . . . ?”

This and more youthful self-indulgence @ http://pandodaily.com/2012/03/27/why...new-york-city/

[Cal_Escapee]

San Francisco's "peer-to-peer" Lending Club just landed a whale from the world of very high finance.

John Mack, former CEO of Morgan Stanley, is the newest member of its board, the online company announced Thursday. The appointment is a significant milestone for Lending Club, which has originated more than $580 million in loans since the launch of its peer-to-peer program in 2007.

The program, which acts as a go-between for low-interest personal loans between credit-worthy borrowers and lender/investors, was called "a winning combination" by Mack. "I am truly excited to serve on the company's board," he said in a statement.

Peer-to-peer lending is not the only Bay Area connection Mack has made since he stepped down from the top post at Morgan Stanley two years ago. In March, he was named a senior adviser to KKR & Co., the bi-coastal private equity behemoth, run by Henry Kravis in New York and George Roberts in Menlo Park.

Source: http://www.sfgate.com/cgi-bin/articl...1IRA.DTL&tsp=1

[Cal_Escapee]

Andrew S. Ross
Published 8:37 pm, Wednesday, January 16, 2013

Might Michael Dell consider moving here?

It would make sense if a Bay Area private equity firm succeeds in its goal to take his eponymous company private. He would be closer to the new owners of what not long ago was the largest PC maker in the world. He will also be within walking, or at least driving, distance of the company's R&D center, located in a 250,000-square-foot complex on Great America Parkway in Santa Clara.

And, the weather, dare we say, would be more commodious than Austin, Texas.

It all depends on whether Silver Lake Partners, which coincidentally just raised $7 billion for its newest buyout fund, persuades Dell and others involved in the deal that a leveraged buyout is the way to go. Bloomberg reported Wednesday that Silver Lake was close to lining up about $15 billion of the $22 billion to $25 billion the deal is estimated to cost.

Neither Dell nor Silver Lake has commented, but the private equity firm, headquartered in Menlo Park, has been talking to prospective partners, like banks, other equity firms and perhaps pension funds. Should the deal go through, it would be the largest debt-financed buyout of a public company in several years.

It would also be the biggest deal in the 13-year history of the Silicon Valley investment firm, which specializes in "mature" technology investments . . . .

As alluring as the deal is to Silver Lake, many analysts doubt it holds as much promise for Dell. Already carrying $9 billion in debt, according to Bloomberg, the besieged computer company would be burdened even more by a leveraged buyout, which would crimp its ability to move beyond the fading consumer PC business into areas like cloud computing and corporate applications . . . .

On the other hand, Dell has plenty of cash on hand - $11.3 billion as of November - and a still-significant revenue stream ($58.6 billion last year). Plus, Michael Dell is reportedly prepared to kick in some or all of his 16 percent stake in the company, worth $3.5 billion, as part of the deal . . . .

And Silicon Valley is standing by, willing to help.

http://www.sfgate.com/business/botto...ld-4200798.php

[pesto]

Certainly amazing how quickly Dell went from superstar to afterthought.

I assume Sliver Lake wants to leverage the s/w technology since this actually looks like an area where money can be made. Maybe spin-off the PC business altogether.

Over there, through the haze to I see a sign saying "DELL Stadium: Home of the 49ers" ?