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LEASING DOWN SLIGHTLY
Following a record second quarter, leasing volume dipped slightly in the third quarter, totaling 2.5 million square feet (msf). Larger tenants remained active though, with several additional 100,000-plus-sf leases completed. Tenants have leased more than 10 msf in the four most recent quarters.
AVAILABILITY FALLS SHARPLY
San Francisco’s overall availability fell sharply for the second straight quarter, declining by 190 basis points overall to 9.0%. The Class A rate decreased by 220 basis points to 8.4%.
RENT JUMPS
The average total asking rent rose by 2.5% to $68.53. Class A rent averaged $72.42, a 4.5% quarter-on-quarter increase.
SALES DROP
Office property sales during the first seven months of the year totaled $2.7 billion, a 25.4% decrease compared to the first seven months of 2017.
"With few larger blocks of prime Class A space remaining for lease, deal volume dropped slightly from the strong secondquarter volume. Availability still posted a sharp decrease. Smaller startups continue to seek out alternatives to the market, though, raising concerns about the depletion of San Francisco’s entrepreneurial base."
Savills Studley Research