San Francisco beats Manhattan to most expensive office rent in the US

San Francisco’s average office rent price was $72.26 a square foot in the fourth quarter of last year, surpassing Manhattan’s price of $71.85

A Google logo is seen through windows of Moscone Center in San Francisco during Google's annual developer conference, Google I/O, in San Francisco (Getty Images)

San Francisco is home to the most expensive office rent in the US, thanks to its booming tech market.

San Francisco’s average office rent price was $72.26 a square foot in the fourth quarter of last year, surpassing Manhattan’s price of $71.85 a square foot for the first time in ten years, according to a report by real estate service and investment firm CBRE, cited by the New York Times.

Prices in San Francisco rose 14 per cent last year, compared with 7 per cent in Manhattan, according to the report.

Tech companies such as Twitter, Uber and Airbnb, which set up their headquarters on the West coast, have contributed to rising prices.

Colin Yasukochi, director of research and analysis at CBRE, told the New York Times that about 29 per cent of the occupied office space in San Francisco is now filled with tech tenants.

“The market here in San Francisco has been largely driven by the tech industry, which has really been one of the growth leaders coming out of the recession,”

“Manhattan is more dominated by financial services firms who were not on that same growth trajectory coming out of the recession,” Mr. Yasukochi said.

Rising office space costs in San Francisco have also put pressure on the housing market.

According to a separate research by real estate data website Zillow, the average Apple worker’s home is worth more than five times as much as the average American home.

While workers at Google, Facebook and Apple live in pricier homes than other Bay Area workers and have faster home value growth than other workers, especially at times when the company is successful, the research found.

Only 35 per cent of San Francisco residents actually own houses.

Tech employee are not immune to the most expensive rental market in the US. It can cost Airbnb employees half their salary in rent if they want to live near their office, according to research carried out by listing startup Redpad.

With offices located in South of Market (SoMa), one of the city’s most desirable neighbourhoods, Airbnb workers would face a median rent of $3,396 for a one bedroom flat.