According to Colliers International’s mid-year report, office leasing in San Francisco totaled 4.5 million square feet in the first half of 2012, over 4 million for the first time since 2004 and versus a historical average of 6.5 million square feet per year.
The current office vacancy rate measures 11.6 percent in San Francisco, ranging from 30.2 percent around Yerba Buena to 4.2 percent in East SoMa. Of the 9.8 million square feet of vacant square footage in San Francisco, roughly half is in the Financial District which has a current vacancy rate of 9.6 percent.
Average office rents in San Francisco have popped 10.1 percent over the first half of the year, from $38.60 to $42.63 per square foot with Colliers predicting a total increase of 15 percent in 2012, roughly back to year 2007 levels but well below year 2000, the year after which rents in San Francisco fell 50 percent.
Colliers predicts office rents will rise another 10 percent in 2013, five percent in 2014 and be flat in 2015 as a backlog of building comes online and vacancy rates plateau around 10 percent versus around 3 percent at the end of 1999. Click either chart to enlarge.