So what happens when the tech market turns, and when the layoffs spread from smaller companies, and from Motorola and Yahoo and the like to the Big Five, and they dump some of the vast leased space they’re now warehousing for future use on the sublet market?
Everyone here who’s been through this before knows what will happen. Sublease space will skyrocket. It will turn the market upside down. Demand will evaporate overnight. The market will become illiquid. Deal volume will crater. Lease rates will follow. This is always how it happens after such a boom.
“All it takes is a couple of big tech companies folding and the floodgates open, causing the sublease market to blow up, rents to drop, and new construction to grind to a halt,” according to Savills Studley new report on San Francisco. Read… “Market is on Edge”: US Commercial Real Estate Bubble Pops, San Francisco Braces for Brutal Dive
Thursday, May 12, 2016
Just How Exposed Is Silicon Valley’s Real Estate Market to Apple, Google, Facebook, Amazon, and LinkedIn?
Wolf asks a great question: