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San Francisco Market Reports

San Francisco Office Market

Average Asking Rent (Price/SF) $86.23
Vacancy Rate (%) 2.9%
Net Absorption (SF) 905,272

 

At the end of the third quarter of 2019, the overall vacancy rate dropped 40 basis points to 2.8%, and overall availability dropped 70 basis points to 7.8%, while demand of 7.6 million square feet outpaced supply. Year-to-date leasing activity remained constrained, down 26.3% compared with the same period last year. Despite the tight market, more than 1.0 million square feet was absorbed during the quarter, over half of which resulted from Dropbox's move into 656,482 square feet at 1800 Owens Street.

Of the 3.3 million square feet currently under construction 84.0% has been pre-leased or is rumored to be in leases. Although the city granted Prop M allocations to several developments during the summer, these projects are not expected to break ground this year. As a result, vacancy is expected to stay low, and supply and demand will remain unbalanced until at least 2022 or 2023. The restricted supply continues to push asking rates, which increased 8.9% year-over-year to $82.23/SF. Class A asking rates increased 10.5% year-over-year to $91.22/SF.

 

 



San Francisco Office Market Report
3Q19
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