As with all office-space needs, the difference is employee-driven: Where do they need their talent to work? It's a difference of size and youthfulness, says Shayeb.

SAN FRANCISCO—GlobeSt.com recently had an exclusive chat with Markus Shayeb,SVP of tenant advisory at Transwestern’s San Francisco Bay Area office on the trend of tech companies moving from Silicon Valley into San Francisco.

GlobeSt.com: What is the difference between the tech companies you see taking space in Downtown San Francisco and the huge campuses being built in Silicon Valley?

Markus Shayeb: As with all office-space needs, the difference is employee-driven: Where do they need their talent to work? It’s a difference of size and youthfulness. There are older, mostly larger firms whose clients are all around the world and don’t need their employees to be in San Francisco to service customers in India. There is also the generational issue: If you’re a more established company such as Hewlett-Packard, a large share of your employees can live and work in the suburbs.

GlobeSt.com: So, is it the younger companies as well as the younger talent that works in The City?

Shayeb: The younger companies seem to believe they must be in San Francisco. A lot of the demand here in The City is from companies that have grown to more than 200,000 or 300,000 square feet, such as Dropbox. Salesforce started out at about 100,000 square feet and is now using more than 1 million square feet.

GlobeSt.com: Will that dynamic change as smaller companies get bigger and bigger? Will they look in other places, maybe outside of the Bay Area and California even?

Shayeb: Yes, this dynamic will evolve. Once your company achieves a certain size you can carve out your accounting department, for example, and move it to, say, Texas, where costs are lower. The current peak demand in San Francisco comes from the 50,000 to 200,000-square-foot tenants tripping over each other for prime space. They will not be looking at Texas or even Sacramento any time soon.