SF Office Market: 19.4 Million SF Available for Lease

SAN FRANCISCO-Some 19.4 million sf of office space is available in San Francisco this week, pushing overall vacancy rates to 20.81% and direct vacancies to 12.71%, according to Costar Realty’s latest availability and vacancy report. The overall figure includes direct vacancies, sublease availabilities and currently occupied space being advertised for lease.

The 25-million-sf Downtown Financial District is best off this week, with a 7.44% direct vacancy rate and a 13.47% overall rate. The 15-million-sf South Financial District has a 9.16% direct vacancy rate and a 17.61% overall rate. The 2-million-sf SOMA District, meanwhile, has a 22.95% direct vacancy rate and a 28.75% overall vacancy rate, and the 1-million-sf Lower SOMA District has over 40% available on a direct basis and more than 50% available overall.

The average rental rate for the city has dropped to $31.90 per ft, annually, which is at or below the average from 1988. Rates in the South Financial District are commanding the highest average rate, $60 per sf, while prices in the 900,000-sf Mission Bay district are averaging $23 per sf.

Development in the city may have drastically declined as a result of the crumbling market, but it is not at a complete standstill. GlobeSt.com has been informed of three projects that are in the construction stages and have not been canceled or delayed.

The State Compensation & Insurance Fund is developing a 400,000 sf, 15-story, structural steel frame building at 55 Ninth St., valued at $70 million.

The Jewish Community Center is building a 220,000 sf, 6-story building at 3200 California St. for $38 million. Construction is scheduled to begin next month on the project.

Finally, Myers Development has a 26,000 sf glass tower office building project in the works. The office tower is located at 55 Second St., and will cost an estimated $22 million.