Silicon Valley beats New York in office rents

Want to rent an office in Silicon Valley? Got Money? Home prices and stock

values are not the only types of property that are experiencing skyrocketing

price hikes in Silicon Valley. Office space rates have jumped to an average $51

per square foot per year, up from less than $25 three years ago. The current

rates equal those charged for office space in the sky-scraping towers in New

York’s Manhattan.

Orix, a Japanese financial services company, recently sold a 135,000 square

foot office building in San Mateo for about $49 million or $365 a square foot.

By comparison, the Tishman Building on Manhattan's prestigious Fifth Avenue

recently sold for about $345 a square foot.

Technology companies in Silicon Valley are bidding up rents to record levels

to acquire what little space is available. "The marketplace in Silicon

Valley is about the fastest, strongest one in the country right now,'' said

Glenn Whitmore, a managing director and senior vice president for Los

Angeles-based CB Richard Ellis Services. The demand is driven in part by the

hundreds of Internet companies that are sprouting up almost monthly. Unlike

previous generations of start-ups, which manufactured products, the vast

majority of Internet companies operate out of office space.