Commercial real estate in the San Francisco Bay area is competing with New York City for the title of the hottest market in the United States. The boom is fueled by the rapidly growing technology sector, with companies like Google, Apple and Facebook paying premiums for space because they fear the risk of losing new talent more than they fear overpaying for real estate.

Transaction speeds have stepped up the pace this year. It is becoming increasingly common for terms around document negotiation to be addressed by the parties in their Letter of Intent. Owners are increasingly reluctant to remove a listing in exchange for an exclusivity period without some assurance that their contract will be signed before the expiration of this arrangement. This places additional pressure on the legal teams and business representatives to provide advice and reach decisions in days rather than the weeks or months that is the historical norm in many markets. Clients are finding value in firms like Reed Smith that have the necessary ‘bench strength’ to handle this heavy lifting under tight time-line constraints. 

In a recent Law360 article, I suggested that technology companies and their attorneys should take an assertive approach to this volatile market. There is a need to communicate to all levels of the client’s company the high-pressure nature of the commercial real estate environment in the Bay area.

Our advice on Bay Area commercial real estate: “Act now. Don’t wait.”

For the complete article, please see Law360’s “Tech Cos.’ Chase for Space Adds Deal-Making Complexity.”