San Francisco Market Correcting Thanks to Mission Bay Leases

A growing online gaming company, Zynga, is negotiating to lease a vacant waterfront building at Mission Bay, the 303-acre neighborhood on the central bayshore of San Francisco. In the meantime, a biotech firm has announced that it will relocate nearby, indicating that the development area is making progress. Some are taking this as a signal that San Francisco’s commercial real estate market finally is correcting.

Zynga, which has several hundred employees and two offices elsewhere in the city, wants to lease three floors in a six-story, glass-and-brick building at 500 Terry Francois Blvd., just south of a new condominium complex and directly across the street from the Bay View Boat Club.
South Bay biotech company Nektar said it would move its 150 employees and headquarters to another Mission Bay location, taking over a 10-year lease from Pfizer, the large N.Y.-based drug company, which abandoned its plans to move a biotech research center there last July.
City officials have announced that about 60 percent of Mission Bay’s 4.4 million square feet of space designated for development had either been built, was under construction, or had received permits.

While Mission Bay activity is coming along, new data shows that the amount of newly vacated office space in San Francisco has decreased from 900,000 square feet in the second quarter to 127,000 square feet in the third quarter--indicating a moderation of the downward trend in the commercial real estate market.