San Francisco’s workplace sector continues to carry out nicely throughout a number of metrics, in line with Yardi Analysis Knowledge. Funding gross sales surpassed the $1 billion threshold year-to-date as of June, putting the metro within the prime 10 U.S. workplace markets. Regardless of low cost offers rising nationwide, the Metropolis nonetheless had among the highest costs per sq. foot within the nation.
In the meantime, the event pipeline stored regular as no new undertaking groundbreakings had been registered within the first half of the yr. Building exercise carried on at a brisk tempo, with completions marking a 37.3 p.c year-over-year leap. Consequently, the metro’s workplace emptiness price remained some of the elevated within the nation.
Sturdy gross sales exercise, excessive costs in San Francisco
In the course of the first half of 2025, San Francisco’s workplace gross sales quantity amounted to $1.1 billion, putting the metro on the sixth spot among the many prime 25 U.S. workplace markets and the fourth amongst gateway markets.
Washington, D.C., had the most important gross sales quantity within the nation, totaling $3.1 billion, whereas Manhattan ($2.8 billion) and Los Angeles ($1.4 billion) rounded out the highest 3. Seattle was on the reverse pole, with $275 million in transactions.
As of June, workplace properties within the metro modified fingers for $237 per sq. foot on common—above the nationwide $189 per sq. foot. San Francisco remained some of the costly metros within the nation, additionally rating fourth amongst its friends.
Manhattan led the gateway markets with $437 per sq. foot, adopted by Los Angeles ($289 per sq. foot) and Miami ($255 per sq. foot). In contrast, Chicago had the smallest sale costs, averaging $57 per sq. foot.
One of many largest transactions that closed for the reason that begin of 2025 was Ridge Capital Traders’ $76.3 million buy of 33 New Montgomery St., a 240,134-square-foot workplace mid-rise. Barings offered the asset at a substantial smaller worth than the certainly one of its earlier 2014 commerce, which amounted to $148.9 million.
In one other important deal, LendingClub Corp.’s $74.5 million acquisition of 88 Kearny St., a Nineteen Eighties-vintage constructing in downtown San Francisco. Nuveen Actual Property offered the property after 26 years of possession.
San Francisco’s pipeline nonetheless robust
San Francisco’s under-construction pipeline included practically 2.1 million sq. ft of aggressive area throughout 9 properties, representing 1.1 p.c of present inventory—approach above the nationwide common of 0.6 p.c. Amongst gateway markets, Boston (2.3 p.c) and Miami (2.0 p.c) occupied the primary and second spot, respectively; all the opposite metros had been under the nationwide common for pipeline dimension as a share of inventory.
By way of sq. footage, San Francisco ranked sixth amongst gateway markets. Boston led, with practically 6.8 million sq. ft underway, whereas Manhattan (5.5 million sq. ft) and Seattle (4.7 million sq. ft) adopted. The smallest under-construction pipeline belonged to Washington, D.C. (782,606 sq. ft).
One of many largest tasks underway in San Francisco is IQHQ’s Spur Part One, a 330,300-square-foot life science growth at 590 Dubuque Ave. in South San Francisco, Calif.
The developer broke floor in 2022 on the constructing that’s a part of the Spur district, a 2.6 million-square-foot workplace and lab growth. Backed by a $275 million development mortgage, Part One topped out in 2024 and is anticipated to succeed in completion this yr.
The second-largest growth is Avia Labs at Millbrae Station, a 315,000-square-foot constructing at 210 Adrian Court docket in Millbrae, Calif. Owned and developed by Longfellow Actual Property Companions, the all-electric life science undertaking broke floor in 2023 and its supply is estimated for the tip of August this yr.
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In the meantime, workplace deliveries totaled greater than 1.7 million sq. ft throughout 5 properties, accounting for 0.9 p.c of San Francisco’s present inventory. The amount was up by 37.3 p.c year-over-year.
The most important completion concerned the second part of Kilroy Oyster Level, a life science campus developed by Kilroy Realty in South San Francisco, Calif. Comprising 865,000 sq. ft throughout a trio of buildings, this $940 million growth, a part of the agency’s 3 million-square-foot waterfront undertaking, broke floor in 2021.
San Francisco’s rents, second-highest within the U.S.
The metro’s workplace emptiness price remained elevated, clocking in at 27.7 p.c in June—approach above the nationwide common of 19.4 p.c. The index, marking a 230-basis-point enhance over the previous 12 months, was the second-highest within the nation after Austin’s 28 p.c.
Amongst gateway markets, Seattle additionally recorded one of many highest vacancies, at 26.7 p.c, whereas the opposite metros had charges under the nationwide common. Specifically, Manhattan registered a 15.2 p.c emptiness, whereas Miami’s 14.3 p.c was the bottom among the many prime 25 U.S. markets.
In the meantime, San Francisco’s itemizing charges stood at $63.01 per sq. foot—practically double the nationwide common of $32.87 per sq. foot. The market was the runner-up for the costliest rents nationally, outperformed solely by Manhattan ($67.97 per sq. foot).
Gateway markets that adopted embody Miami ($56.97 per sq. foot) and Boston ($46.06 per sq. foot). Chicago recorded among the most inexpensive rents, averaging $27.82 per sq. foot.
Notable leases signed within the first half of 2025 embody The U.S. Division of Veterans Affairs’ 57,000-square-foot dedication at 1950 Franklin St. in Oakland, Calif. The deal, which closed in Could, marked the most important workplace lease within the metropolis since 2021.
Throughout the identical interval, crypto large Coinbase negotiated a 150,000-square-foot headquarters lease at Mission Rock Constructing B. The dedication resulted from the corporate’s determination to determine a brand new central workplace after 4 years of distant work.
San Francisco’s coworking market holds its personal
San Francisco’s coworking market comprised 3.6 million sq. ft unfold throughout 138 places as of June, rating sixth for sq. footage amongst gateway markets. Manhattan occupied the primary place, with practically 11 million sq. ft, whereas Chicago was the runner-up with 8.2 million sq. ft.
The metro’s share of flex area as a share of whole leasable workplace area clocked in at 2.1 p.c—barely above the nationwide common of two p.c. Miami led this rating with 3.8 p.c, adopted by Chicago with 2.5 p.c.
The market’s prime 5 flex workplace suppliers remained unchanged since our earlier market replace: WeWork led, with places totaling 736,795 sq. ft, adopted by Regus (377,255 sq. ft), Studio by Tishman Speyer (256,759 sq. ft), Areas (217,956 sq. ft) and Industrious (160,998 sq. ft).
