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San Francisco continues to claim majority share of Bay Area venture capital

• The Bay Area has long been regarded as the center of technological innovation, housing some of the most notable tech companies of today and claiming 40 percent of all US venture capital funding since 2002.

• San Francisco has always been a part of this narrative, but until recently was not considered quite the hot bed that neighboring market Silicon Valley was. With their proximity to Sand Hill Road, Silicon Valley-based start ups and companies had preeminent access to venture capital funding.

• However, since 2015, San Francisco has consistently accounted for the majority of Bay Area VC funding, ending the first quarter with a 69 percent share, which translates to 30 percent of all US funding. Tech companies are setting up shop in San Francisco to attract and retain talent while a growing number of Silicon Valley-based VC firms are opening offices here to be close to the companies they fund.

• This in turn has created significant organic growth in San Francisco, which is putting pressure on market fundamentals. With vacancy in the single digits, tenants face stiff competition and pricing when searching
for space.

Source: JLL Research, PwC MoneyTree

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