Role in the Region: BART is critical to the economy

In July, BART released the Role in the Region Report, a comprehensive study of BART's impact on the Bay Area illustrated by new analyses, data visualizations, and powerful personal narratives. Over the coming weeks, we'll be sharing some of the key insights from the report in a series of Role in the Region articles here on bart.gov. Read the first article here. We encourage you to read the full report - click here - and visit the project webpage at bart.gov/roleintheregion. 

Today's post examines BART's impact on the regional economy. See the full report for methodology.

Fueled by unparalleled venture capital funding, a resilient technology sector, and a growing cluster of artificial intelligence (AI) companies, the Bay Area economy remains hot. BART provides access to a region at the leading edge of technological innovation and economic investment. Since 2021, the Bay Area has regularly attracted at least 50 percent of the total venture capital investment in innovative sectors such as information technology. 

San Francisco and the Peninsula

San Francisco continues to be a haven for innovative technology-focused businesses, and many firms cluster in BART-adjacent neighborhoods like South of Market and Hayes Valley.

Proximity to BART is a must-have for San Francisco’s downtown office market. Historically, office buildings near BART have outperformed non-BART accessible buildings based on market rents. Downtown San Francisco also has multiple “trophy” office buildings, which are commanding Downtown San Francisco’s highest rents and have the lowest vacancy rates. These buildings are all within a 15-minute walk of a BART station.

Top 15 San Francisco Office Buildings by Monthly Rent

Along the Peninsula, mutual growth in development and BART ridership is expected. At Millbrae Station, the newly opened Gateway Transit Oriented Development has over 157,000 square feet of office space, ground floor retail, a 164-room hotel, and 400 residential units. At San Bruno Station, the Southline project is slated for occupancy by the end of 2024 and is made up of 2.8 million square feet of office and research and development space. The existing Tanforan Mall is also in the process of planning to transform into a transit-oriented mixed-use village with 2 million square feet of life science, 1,014 housing units, and 86,000 square feet of retail space.

The East Bay

The East Bay’s economy continues to uniquely leverage BART. Employment centers in the East Bay, which has the highest concentration of BART stations in the system, represent tremendous regional growth potential.

Emerging industries are choosing to locate in BART-served parts of the East Bay. These emerging industries include creative technology and design— like software publishing, data processing, and advanced manufacturing. In addition, there are emerging industry-specific job hubs for manufacturing in Fremont and wholesale trade in Union City. While most AI investment has gone to companies in San Francisco or the Peninsula, the East Bay has its own innovation industries, including biomedical device manufacturing, computer technology, food innovation, and clean tech. These industries and others have driven demand for almost one million square feet of R&D and manufacturing space in the last ten years and attracted $5.5 billion in venture capital in 2021.

East Bay Office Space Rent per Square Foot

Many East Bay cities are responding to changing economic trends by adding jobs and housing. East Bay cities are leveraging access to BART to help shift market momentum towards their downtowns and prime infill locations. Demand and rents for East Bay commercial and industrial space remain high. Figure 2.9 shows that BART-served cities like Fremont and Walnut Creek continue to see increased rent for office space, and East Bay office rents have increased 59 percent overall since 2013. The East Bay industrial market continues to see high demand for warehouse and manufacturing space, with 11 consecutive quarters of net positive square footage leased as of 2023’s first quarter, with brokers and developers reporting an increased interest in transit accessibility for industrial tenants.

What BART Riders Say

When starting his own business, Raja Singh (pictured below with his son, Tyler) realized that transit would serve his employees’ well-being and morale. It also, as an added bonus, would serve his own interests and priorities as the head honcho. 

"People perceive going into the office as somewhat of a burden, and I thought it was important to make it as easy as possible for folks,” he said. “It’s more relaxing to get on BART and zone out or work than it is to navigate a tunnel and bridge then find parking downtown.” Raja would know – he's been commuting by BART for well over a decade. 

Raja also cited the recruitment benefits of headquartering his company by transit. They can enter the office, at 44 Montgomery Street, directly from the station, without having to step foot outside. Raja said nine of his employees live in the Bay Area and all of them commute by transit – seven take BART and two travel by Muni from their homes in the city. 

“Because we’re located at a transit hub, we can recruit from the East Bay, the South Bay, the Peninsula, and the city all at once, and it’s equally easy to get there,” he said “There's nowhere else in the Bay where you can say that. It gives you the broadest recruiting reach.” 

Read more about Raja here.