Anita Ghai, CBRE's research manager for the Bay Area tells GlobeSt.com that the sharp increase was caused in part by several leases rolling on spaces that the paying tenant had previously vacated. The other, more obvious factor was a decreased amount of leasing activity, which Ghai attributes to a post-Holiday lull and fewer leases rolling in 2007 and 2008 than occurred in 2005 and 2006.
The only other submarket to see its vacancy rate change by a full percentage point was the Waterfront/Jackson Square submarket, and that was for the better. The 6.5-million-sf market saw vacancy fall to 6.7% from 8% on 88,803 sf of positive net absorption.
The South Financial District saw more net absorption, 112,109 sf, but because of its 23.2-million-sf inventory the activity moved the vacancy rate down only 40 basis points, from 7.3% to 6.9%.
The negative net absorption in the North Financial District caused market-wide office vacancy to increase for the first time in more than three years, according to the CBRE report. That said, it was slight. Overall negative absorption was 53,000 sf, pushing the overall average vacancy rate to 8.6% from 8.5%.
The stagnation failed to slow down asking rates, least of all in the North Financial District. The average class A asking rate in the North Financial District now stands at $44, an 18% increase from the start of the year. The market-wide average class A asking rate now stands at $35.86 per sf per year, 9.5% higher than at the start of the year.
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