San Francisco market dynamics hold for a third consecutive quarter with several large leases signed before year end, helping to offset additional new sublease supply

Leasing activity totaled 1.8 million square feet (msf) in Q4 and demonstrates a significant rebound from one year ago when leasing hit a low point of 0.2 msf. This is the third quarter in a row that leasing has been over 1.0 msf and it has helped to keep availability flat at 26.1%. Many notable leases came from the tech industry, one of the first sectors to embrace remote work ideologies at the start of the pandemic, and now also among the first confident to move forward with leasing decisions. While transaction volume is up, some of the leases signed have been contractions which will do little to chip away at the oversupply of space. Three leases over 150,000 square feet (sf) were signed in the quarter including BlackRock (206,000 square feet), Chime (203,000 sf) and Twitter ( 164,000 sf). Additionally, Citigroup signed for 76,000 square feet (sf) at 1 Market Street, a relocation and contraction from 1 Sansome Street where the banking giant leased just over 100,000 sf. Citigroup is one of the few in the financial services sector to announce long-term remote flexibility options for employees – which likely contributed to its decision to lease less space.

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