San Francisco Office Market
Leasing in the first quarter of 2017 was at the greatest volume since the first quarter of 2015. Tenant demand rebounded to 6.2 million square feet after dipping below 5.0 million square feet at the end of 2016. The vacancy rate increased to 6.2% from 5.8% last quarter; annual direct asking rates rose slightly to $70.66/SF. Availability increased to back above the 12.0% mark after dropping to 11.1% at the end of 2016; sublease availability crept back up to third-quarter 2016 levels to 2.8%.