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Thursday, March 3, 2011

Key Economic Indicators Hint At Local Recovery

Posted By on Thu, Mar 3, 2011 at 11:55 AM

click to enlarge Well, not an economic boom exactly... - MATT SMITH ILLUSTRATION
  • Matt Smith illustration
  • Well, not an economic boom exactly...

San Francisco hasn't yet fully emerged from the mortgage-meltdown: Lingering effects include depressed Bay Area employment, which declined 1.4 percent last year, and lackluster housing prices, which remain flat.

However, some other indicators suggest faint signs of a local economic rebound, including a positive change in office vacancy rates, apartment rents, and tourism.

According to the San Francisco Controller's latest Economic Barometer report, local rents climbed 14 percent in 2010, which tells us that people with paychecks are signing apartment leases.

Meanwhile, hotel revenue per room -- a key tourism gauge -- was up 24 percent in December compared to the previous year. Office vacancy rates dropped slightly, while there was a higher demand for "Class A" fancy office space, which went for 7 percent more than 2009. This  suggests local companies are expanding, rather than shrinking and dying as they had between 2008 and the end of 2009.

According to the report:

San Francisco's office market is showing signs of recovery nearly three years after the

market last peaked at the start of 2008. Increased tenant demand has resulted in two

consecutive quarters of positive net absorption beginning in Q3 2010, after nearly two

years of tenants putting more space on the market than they were leasing.

Another hopeful economic indictor not included in the controller's report: San Francisco small businesses are changing hands at a higher than ordinary rate, Bloomberg reports:

In January, 62 small and midsize businesses changed hands in San Francisco, almost double the 34 deals that closed a year earlier, according to Dublin, California-based For all of 2010, 535 companies sold, compared with 502 in 2009. 

This year should see more gains in small businesses purchased, the report added.

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