July 11, 2017
The San Francisco office market remains exceptionally strong, as reflected by several new office towers rising and at least a dozen searches underway to fill 100,000-square-foot space requirements, according to the latest market research by Kidder Mathews. Q2 2017 occupancy levels were unchanged, though there was 16,679 square feet of positive net absorption.
The market added two more leases in excess of 100,000 square feet, bringing the 2017 total to eight. Asking rents for creative offerings increased by as much as 5% year-over-year, while traditional offices trended slightly downward, prompting Class A landlords to offer substantial tenant improvements to attract a wider range of users.
Q2 2017 performance indicators:
- Overall, Class A Financial District rents averaged $70.63, Class B offerings $65.90, and Class C creative product $67.38
- National and foreign investors found desirable acquisitions in San Francisco
- More than 6.5 million square feet of office space under construction at quarter’s end
- Ample demand among technology giants suggests rental rates for creative offices are unlikely to fade, despite the impending increase in supply
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