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."
This article is presented for informational purposes only and is not intended to constitute legal advice.
