Search
 

Office Report: In-Migration Keeps San Fran Absorption Climbing

SAN FRANCISCO-The market has seen 1.9 million sf of net absorption so far this year--half of it thanks to tenants relocating from outside the city--making it likely to surpass two million sf for the first time in five years. The pace of improvement has some thinking overall vacancy could drop into single digits by the end of 2007.

By Brian K. Miller | Updated on October 16, 2005

SAN FRANCISCO-The metro area office market continued an impressive recovery in the third quarter with just over one million sf of net absorption that dropped overall citywide vacancy 80 basis points to 16.5%, according to the latest market report from Cushman & Wakefield. Class A vacancy fared even better, dropping 150 basis points to 16.3%.

With nearly 1.9 million sf of net absorption registered year-to-date, the office market is on pace to eclipse two million sf of net absorption for the first time since 2000, according to the report. Just over half of the YTD net absorption is due to tenants moving in from outside the city. A big chunk of the total came this past quarter when LucasArts moved its 700,000-sf headquarters from Marin into the newly constructed Letterman Digital Arts Center in the Presidio. For the year, in-migration has accounted for 945,539 sf of net absorption, or 50.3% of the YTD total.

The South of Market CBD apparently will be the first to see vacancy dip back into single digits. In the third quarter, overall SOMA CBD vacancy fell 140 basis points to 10.4% while class A SOMA CBD vacancy fell 220 basis points to a tidy 10.0%. In the North of Market CBD, overall vacancy rose 80 basis points to 14.0% while class A NOMA CBD vacancy rose 80 basis points to 14.2%.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.