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Market Report: Bottom of Market Still Way Off

SAN FRANCISCO-While many have been hoping to see significant recovery this year, Grubb & Ellis experts say that any significant recovery is at least two years away.

By Michelle Savage | Updated on July 09, 2002

SAN FRANCISCO-According to Grubb & Ellis’ Second Quarter 2002 report, there is little hope for those hoping to see the bottom in today’s depressed San Francisco commercial market, as rents continue to fall and vacancies continue to rise.

Grubb & Ellis reports that the overall vacancy rate in San Francisco has risen one percentage point to 22.1%, while the average asking rental rate also dropped to $31.28 per sf for Class A space and $22.32 per sf for Class B space.

However, the company says that there is a brighter side to the gloomy market. Colin Yasukochi, Research Director at Grubb & Ellis says that the office market is starting to show some signs that the end of the depression is near. These signs include a significant reduction in the rate of increase in vacancy and rate of decrease in average asking rents, an increase in the gross amount of leasing or basic market activity, and positive net absorption or demand for class A buildings.

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