Tech boosts Bay Area success

Commercial construction in California's Bay Area is reaching new highs.

2013 is set to be the best year on record in terms of commercial real estate in California's Bay Area, thanks to a huge tech boom pushed by social media, apps and mobile devices. The industry in the area, which spans nine counties, is expected to exceed $6 billion this year, according to the San Jose Mercury News' analysis of McGraw Hill Construction figures.

In the first nine months of the year, the value of commercial real estate in the Bay Area hit $4.9 billion, well more than 2009, 2011 and 2012 altogether. 2010's sum was $5.41 billion, the newspaper reported. Total spending for this year is expected to be $6.3 billion to $6.7 billion, beating McGraw Hill's record of $6 billion, which was experienced in 2000.

"High tech is spurring this – you have the Facebook, Samsung and LinkedIn buildings that have gone up or are going up, and you have expansions by Google (GOOG) and Apple (AAPL)," McGraw Hill economist Anne Thompson said to the Mercury News. "The economy is improving in the Bay Area. You have strong hiring in high tech that is spurring more demand for office space."

Tech ticks up
One such company is Infoblox, which last year agreed to a deal to expand its new headquarters in Santa Clara. The new facility will be able to accommodate 500 employees, compared to 250 from mid-2012, according to the newspaper. Workers will now enjoy fire pits, sports courts, a cafe, a gym and other amenities that the company hopes will attract and retain top talent in the future.

Another real estate expert in the area, Jeff Hoopes, chief executive of Swinerton Builders, said this growth is directly linked to job creation and shows no signs of a bubble. Another – Chad Leiker, vice president of real estate firm Kidder Mathews – said the increases are linked to rising rents, which are spurring more construction companies and developers to take some risks and start new projects, whereas last year they may have been too timid.

Tech giant Apple also is expected to start construction of its new campus in Cupertino next year, and some experts say it may cost $5 billion. Google also is looking to forward growth with its Mountain View complex.

To accommodate and capitalize on the inevitable surge of people flocking to the area to live and work, developers are starting to plan more housing, office and retail centers on or near public transportation in the Bay Area.

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