I
n the Bay Area, a perfect storm of uncertainty is brewing, courtesy of President Trump's tariffs. While the region's economy has been thriving, fueled by the growth of tech companies and venture funding, the protectionist agenda threatens to disrupt this momentum. According to San Francisco Chief Economist Ted Egan, "the pain will be felt, but the upside will be minimal" if a trade war with China materializes.

    Egan cautions that the tariffs' impact on the commercial sector is still unclear, but notes that the tech supply chain's reliance on Chinese producers makes it particularly vulnerable. Meanwhile, Swig CEO Connor Kidd observes that early-stage companies are less concerned about macroeconomic trends, as they're focused on product development rather than market fluctuations.

    However, as uncertainty lingers, it's starting to affect office demand, with businesses struggling to plan and make decisions amidst the volatility. Venture capitalists may begin to pull back, citing concerns over exit strategies. "It adds a cloud" over long-term thinking required for major leases, agrees Maggie Kadin of Tishman Speyer.

    The tariffs' impact on construction costs is another pressing concern, with estimates suggesting an additional $22.4 billion in steel and aluminum costs alone. Contractors are already factoring in price changes, and Swig is racing to complete spec suites before the tariff impacts hit harder. Despite this, investment market reaction has been tempered, with Eastdil Secured's Jeff Weber noting that international investors have been relatively unaffected so far.

    The industrial leasing market has been most impacted, driven by direct tariffs on trade and an already "priced-to-perfection" market. As the situation unfolds, San Francisco's commercial sector will need to navigate this treacherous landscape, where uncertainty reigns supreme and the future is increasingly uncertain.