Tenants active despite climbing asking rents; strong demand limits options in prime space
Activity in San Francisco kept pace through the first half of the year with 2.5 million square feet (msf) leased in the second quarter, bringing the mid-year total to 5.2 msf. Tenants are on the move, even among ever-increasing asking rents. Asking rents for all classes increased 6.8% year over year, now at $79.78 per square foot (psf). Class A asking rents increased at a similar pace, also rising 6.8% over the year to $85.64 psf. Price is not deterring tenants seeking topquality space, and availability has contracted accordingly. Overall availability dropped 200 basis points year over year to 7.7% and is even more limited in Class A space, now at 7.3% (down 140 basis points year over year).