The frenzied pace of San Francisco’s commercial real estate market doesn’t show any signs of cooling off anytime soon. The underlying strength in the market, boosted by the number of new jobs created by high-growth tech firms and supporting service sectors, results in the ever-present concurrent rise in occupancy levels and the natural rise in rents. From key developments to impressive sales, and huge blocks of space being taken down in lease transactions, this market is recording some unprecedented numbers across the board.

The First and Mission Transbay site is comprised of two towers with 1.35 million square feet of commercial space and 650,000 square feet of residential units.

As a result, the region has become the No. 1 US market in terms of hiring, according to RETS Associates, a West Coast recruiting firm located in San Francisco. The company reports that resulting supply and demand pressures have pushed compensation levels to record highs, and in order to stay competitive, companies are forced to increase base salaries in offers by up to 40% to attract and retain top talent.

Kent Elliott, principal of RETS Associates, tells Real Estate Forum: “The past year has been record-breaking in terms of candidate searches. Year to date, searches for construction and project management positions have increased 33% as compared to the same time period in 2014. Additionally, searches for financial analyst positions have increased dramatically by 64% during the same time period. We are in the midst of a war for talent.”

There are many reasons for this frenzy, but Colliers International’s Alan Collenette, regional managing director, has an interesting take on the rocket ride San Francisco is currently aboard. Because the world’s economic driver is now innovation, this puts San Francisco in the driver’s seat as the unchallenged fulcrum and brain trust for the global innovation economy. The safety from political and climate-based threats in San Francisco has become a major focus for a tremendously mobile workforce with geographic freedom of choice, he says.

When further examining the market from a transactional standpoint, it is safe to say that each sector is firing on all cylinders. In reviewing sales, the most notable one during the first quarter was Salesforce.com’s $640-million purchase from TIAA-CREF with a total of 817,412 square feet. Other key sales included the $219-million purchase by CPPIB of a 45% interest in 1455 Market St. and Emmes Asset Management’s purchase of 301 Howard St. for $200 million from Embarcadero Capital Partners, according to Colliers International.

When looking at the short timespan since the beginning of the year, one of the Bay Area’s largest mixed-use developers has dominated. TMG Partners has been a significant contributor in numerous key transactions, many in the past month alone, but one of San Francisco’s cornerstones has the TMG logo attached to it. In February, TMG Partners and Oceanwide Holdings announced Oceanwide’s acquisition of the First and Mission towers site in the Transbay development. China’s Oceanwide Holdings Co. Ltd. bought the site and TMG Partners is assisting on the entitlement process.

TMG Partners chairman and CEO Michael Covarrubias relates: “We identified the First and Mission site as a great opportunity for its location and the flexibility in what we could develop. With Oceanwide, we will see the full execution of the fantastic architecture team led by Foster + Partners and Heller Manus in a thoughtful mix of workspace, residence and hotel.”

The project is comprised of two towers with 1.35 million square feet of commercial space and 650,000 square feet of residential units. The building housing the hotel and additional residential space will rise to 605 feet adjacent to the 850-foot residential and office tower, including a condominium portion that will be taller than any residential project on the West Coast. Oceanwide’s total investment in building these iconic towers could be as much as $1.6 billion.

Later in the spring, TMG Partners recorded three large transactions, one of which was the acquisition of 505 Brannan St. in the burgeoning SoMa District. TMG Partners partnered with Alexandria Real Estate Equities, a developer of urban science and technology campuses, in forming a joint venture for the a fully entitled 135,000-square-foot development site, complete with Prop M office allocation secured during late 2014.

Matt Field, chief investment officer with TMG Partners, tells Forum: “The project’s transit-oriented location, large floor-plates, side core design and nearby residential and retail amenities ensure strong demand for the project. Combining our expertise in the venture with Alexandria Real Estate Equities is a rare win-win for a development team.”

The other two TMG transactions were in the South Bay, one in partnership with Farallon Capital Management, to sell an 8.5-acre campus in Mountain View, CA to Samsung Electronics. The 385,000-square-foot facility includes twin six-story class A office buildings and two garages plus one acre of open space. The partnership leased the property to Samsung in 2012 prior to obtaining entitlements, as a build-to-suit with a 15–year lease term, including a purchase option after completion, which Samsung exercised.

LUMINA is the largest condo development in San Francisco’s history, comprised of 656 residences in two towers.

The other TMG venture, with Boston-based real estate private equity firm Alcion Ventures LP, was to sell 2851 Junction Ave. The 155,613-square-foot class A office building is in San Jose.

Another key component in San Francisco’s explosive growth is a condo development by Tishman Speyer. LUMINA is reportedly the largest condo development in San Francisco’s history, comprising 656 residences in two towers of 42 and 37 stories, and twin eight-story mid-rise buildings. The project includes one-, two- and three-bedroom residences. The penthouse, located on the top floors, is a two-story duplex of some 15,000 square feet.

Designed by Bernardo Fort-Brescia of Arquitectonica with Heller Manus, LUMINA offers homebuyers a variety of panoramic views of the city and Bay. Residents will enjoy community spaces including a bi-level club lounge, private dining room and theaters, rooftop terrace, a fitness center, 70-foot heated lap pool and private spa. Each resident will have access to 24/7 valet parking and an app that will allow for on-demand vehicle delivery. The project is serving as a growth catalyst activating the surrounding Transbay and Rincon Hill neighborhoods. In 2016, the Market on Main, a gourmet food emporium, will occupy the retail space.

Carl Shannon, Tishman Speyer’s senior managing director of Northern California, tells Forum: “LUMINA strikes the balance of offering residents an urban oasis supported by a suite of incredible amenities, in conjunction with cultural offerings that come with residing in the city.”

Wilson Meany is another prolific developer who has in the recent past worked to meet the Peninsula’s growth demands. Bay Meadows, one of the single largest redevelopment sites in the Bay Area, developed by Wilson Meany in partnership with owner, Stockbridge Capital Group, is set alongside the Caltrain station and Highway 101, and in close proximity to the Bay in San Mateo. This transit-oriented development features a mixed-use neighborhood of homes, townhomes and apartments and LEED Gold-certified office buildings. A central plaza is surrounded by retail and restaurants; a community garden, bike trails, parkland and a new private high school.

According to Janice Thacher, partner at Wilson Meany, “Bay Meadows is brimming with activity and hundreds of residents are ready to welcome the new shops, restaurants, fitness and entertainment options that its next phase of construction will offer. Only steps from the Caltrain station, it’s just the kind of environment that today’s workers desire: rich in urban amenities and part of the fabric of a walkable, bike-friendly, transit-rich community with the added benefit of beautifully designed parks and open space.”

Now two years into construction, Bay Meadows’ plan includes 1,000 units of housing, five office buildings totaling 780,000 feet, 40,000 feet of retail and 18 acres of parks within 83 acres. The community’s Delaware Street is envisioned as a social hub, an intersection of work and play.

“San Mateo County has very little supply of office space over 20,000 square feet. Bay Meadows Station presents a unique opportunity for one of the numerous firms that are expanding in the Bay Area,” says Thacher.

Not to be left behind is the industrial product type, represented by the Trammell Crow Co. development underway in Livermore, CA. Oaks Logistics Center consists of three class A industrial buildings, totaling approximately 1.3 million square feet. The project is scheduled for completion during the last quarter of this year. Building 1, with 636,000 square feet, will feature a 36-foot clear height, while Buildings 2 and 3 will have 32-foot clear heights. The structures will have cross-dock configurations, sprinkler systems and trailer parking.

Strategically located at Isabel Road and the Highway 84 interchange, the site has direct access to Interstate 580 and Highway 84, proximity to the Port of Oakland, and will serve labor pools in the East Bay, Tri-Valley and Central Valley submarkets. Designed to achieve LEED Silver certification, the construction of the project is estimated to create more than 420 green jobs for members of the building trades and more than $157 million in economic activity.

Bay Meadows, one of the single largest redevelopment sites in the Bay Area, is a transit-oriented development under construction in San Mateo, CA.

Will Parker, principal of Trammell Crow’s Northern California business unit, tells Forum: “The team is excited to take part in developing a project that has a positive economic impact for Livermore and the region. Oaks Logistics Center brings higher functionality compared to inventory and addresses the demand for new buildings from today’s supply chain occupiers.”

Aside from sales and development, the leasing side also has been very active, with the most notable lease to be that of Stripe’s recent commitment at 510 Townsend St. in San Francisco. With 300,000 square feet encompassing the entire SoMa building, it is effectively the largest lease deal so far in 2015 and the largest footprint of any tech firm in the city. This lease surpassed Uber’s deal for 173,000 feet at 555 Market St.

“The interior is slated to be transformed into an open, collaborative but comfortable environment with personality such as a rooftop patio overlooking SoMa,” relates Joel Marcus, CEO and founder of Alexandria Real Estate Equities and 510 Townsend’s developer. “We understood what Stripe was looking for and we provided it in this urban dense, amenity-rich location.”

Other large leases during the first quarter included First Republic’s 132,000-square-foot renewal at 388 Market St., Advent Software’s renewal at 600 Townsend St. for 129,000 feet and Cooley’s renewal of 100,765 feet at 101 California St. Among other Q1 attacked Mixpanel’s 61,000 square feet at 405 Howard St.; Corp.’s 53,000 feet at 425 Market St. and WeWork’s 46,000 feet at 995 Market St., reports Colliers.

The Colliers report shows more than five million square feet of office space currently under construction with nearly another 11 million square feet either proposed or in various stages of planning. A phenomenon is resulting in that, as soon as an Uber, for instance, leases a major building, it immediately starts looking for increased space, based on financial fundamentals that its backers believe are sustainable. Some of those tech lessors are now subleasing unused space to other tech companies.

Along with the discussion of leases comes the inevitability of rents. A parallel thought would be that rising rental rates would put a damper on growth as it would be natural for landlords to take advantage of strong fundamentals and raise rents. However, Collenette offers another take, telling Forum: “High rents are the cost of the keys to the kingdom, where the employee is king. Rent, even at elevated levels, is only 8% to 10% of a tenant’s overall budget, with payroll being by far the largest item. Rent is almost irrelevant, as tenants care the most about attracting employees, and the employees want to work in this famous, vibrant city.”

According to Colliers, overall market-weighted rental rates for assets reflected an increase of 0.4% for Q1 and annualized rents climbed to finish the quarter up 5.7%. Prices continued to rise for class A assets in Q1, as the average increased to $717 per foot from $603 in Q4 of last year. The rocket ride seems poised to continue in the Bay Area.