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North Financial District Vacancy Jumps Over 10%

SAN FRANCISCO-On 277,000 sf of negative net absorption, the 26-million-sf submarket sees its vacancy rate rise more than 100 basis points to 10.7%

By Brian K. Miller | Updated on March 28, 2007

SAN FRANCISCO-Vacancy in the North Financial District here rose to 10.7% during the first three months of the year from 9.6% at the end of 2006, according to preliminary data from CB Richard Ellis. The 26.5-million-sf submarket experienced 277,276 sf of negative net absorption during the quarter.

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.

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