Small Offices Scarce in Downtown San Francisco

The small-office user here is in trouble.

To rent about 7,500 square feet of office space downtown is not possible. Or at least not possible without being hidden away in the huge floor spaces of the city’s existing buildings or in the 3 million square feet of planned, large-size office space under construction.

According to a survey by Grubb & Ellis Co. of over 3,000 Bay Area small firms, 54% use only 7,500 square feet. And 71% of the others in this category occupy less than 15,000 square feet. Owners of these businesses--law firms, accountants, financial services, insurance groups, electronics and transportation organizations--say they don’t want to be lost in large, cut-up floor spaces of larger buildings.

“Our clients have a hard time finding our offices,” said one small-firm executive, “when we are just another door along a string of partitioned space. In addition, ‘make-do’ offices in some obscure location of a larger building don’t give our employees much of a unified feeling.”

Grubb & Ellis executive said there will be upward pressure on rents for office space, that is considered appropriate for small businesses.

The small-firm study says that this year and next there will continue to be a limited supply of office space for organizations wanting to locate--about 585,000 square feet in 10,000 square-foot floor increments. From then on, according to present planning, there are no office buildings projected for completion with small-floor areas.