San Francisco-based companies facing steep renewals are asking can they afford to remain in The City and can their employees afford to live where they work? High asking rents and cost of living are forcing tenants large and small to consider right-sizing or relocating.
- The San Francisco Office market ended Q1 2017 with a total vacancy rate of 8.72% which was up slightly from Q4 (7.85%). Jackson Square/North Waterfront (6.01%) and Mid-Market (6.24%) are the tightest submarkets. Van Ness Corridor (12.49%) and Financial District (10.17%) were the only submarkets with double digit vacancy.
- Total market direct asking rental rates for Class A were up slightly to $70.86/rsf (from $70.06 in previous quarter). Class B direct asking rental rates were up to $62.74/rsf (from $61.59 in previous quarter).
- Mission Bay/China Basin ($84.75/rsf), Union Square ($73.64/rsf), SOMA ($72.27/rsf), and Financial District ($72.07/rsf), command the highest Class A asking rents.
- Tenants seeking value are finding abundant sublease (20% of total available space) options in all submarkets and more affordable Class B asking rents in Van Ness Corridor ($52.58/rsf), and Jackson Square/North Waterfront ($58.30/rsf) submarkets.