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LEASING PAUSES
Quarterly leasing activity totaled 1.8 million square feet (msf), declining 31.1% from the fourth quarter of 2017. Tenants have leased 8.8 msf in the four most recent quarters. However, this decline is partially due to a few large leases still pending execution. Leasing is expected push back to the trend line in the second quarter.
AVAILABILITY STABLE
San Francisco’s overall availability inched up by 10 basis points to 10.7% in the first quarter of 2018. The Class A availability rate posted a decrease in the quarter, dropping by 70 basis points to 9.6%.
STABLE RENT
The average total asking rent ticked down by 0.8% to $67.15, but has increased by 4.7% year-on-year. Class A rent averaged $69.15, a 1.2% quarter-on-quarter decrease and has jumped by 7.1% year-on-year.
SALES DROP
Office property sales during the last six months (through February 2018) totaled $1.1 billion, falling sharply compared to the previous six-month total of $3.4 billion.
"Leasing paused in the first quarter, with only one lease exceeding 100,000 sf signed. Nevertheless, space options remain very limited, particularly for the market's biggest tenants. Last year’s scrum for space left the market’s new development pipeline nearly stripped bare of big block options."
Savills Studley Research