San Francisco streets named the most expensive streets in America

Two streets in San Francisco are considered among the most expensive streets for office space, according to JLL’s 2017 Most Expensive Streets study.

The study looks at the priciest U.S. office space, those high-profile strips command an average asking rent of $48.65 per square foot, a 46.9 percent premium compared to the rest of the country. Approximately 12.8 percent of the nation’s most expensive real estate is vacant — 250 basis points lower than the U.S. average.

Rent on Sand Hill Road in Menlo Park, Calif., averages $119.38 per square foot, and has hit as high as $185, making it the number one most expensive street. Fifth Avenue in New York City follows in second with an average rent of $116.04 per square foot, with a top rent of $185, and Mission Street in San Francisco is third, with an average asking rent of $93.68 per square foot, boosting its ranking by two spots since 2015.

While traditional drivers such as the financial, law and consulting industries continue to make their presence felt on these streets, tech is having an outsized effect. In fact, five of the top 10 streets in the ranking are tech hubs.

“As tech companies mature, their space needs begin to mirror those of traditional white-collar industries in these expensive locations,” said Scott Homa, JLL director of U.S. office research. “Sand Hill Road is no longer the only example of this. We see it in cities like Boston, Cambridge and Austin where major tech players have leased large blocks of premium space.”

Added JLL managing director of Capital Markets Frank Petz, “We have seen a shift in tenancy and more migration between Cambridge and Boston. The proliferation of life science players in Cambridge has dislodged many traditional office users, and even tech companies. Cambridge now has vacancy rates near zero and rents at an all-time high, and Boston is benefitting as tech tenants cross the river to take advantage of the value proposition the city offers.”