{"id":1004781838,"date":"2026-08-21T03:27:59","date_gmt":"2026-08-21T11:27:59","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004781838"},"modified":"2026-08-21T06:27:12","modified_gmt":"2026-08-21T14:27:12","slug":"san-francisco-office-market-update","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/san-francisco-office-market-update\/","title":{"rendered":"San Francisco Office Shows Mixed Performance"},"content":{"rendered":"\n

San Francisco’s office sector closed the first half of 2026 with mixed fundamentals, according to Yardi Matrix data.<\/p>\n\n\n

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\"aerial<\/a>
One of San Francisco’s largest projects underway is The Shops at ELCO Yards in Redwood, Calif. Image courtesy of IQHQ<\/em><\/figcaption><\/figure><\/div>\n\n\n

The metro emerged as the national leader for office prices in June. At the same time, the Golden City recorded the highest vacancy rate in the U.S., despite witnessing a significant drop year-over-year.<\/p>\n\n\n\n

As for development, activity contracted, mirroring broader trends for San Francisco office space<\/a>. The pullback reflects the need to absorb existing inventory before additional projects move forward, particularly following a recent wave of completions. And the Golden City fits that profile, with 3.3 million square feet delivered last year<\/a>.<\/p>\n\n\n\n

San Francisco’s record prices drive climbing dollar volume<\/h2>\n\n\n\n

San Francisco\u2019s office investment has picked up pace during the first half of 2026. Investors generated $2.4 billion in sales as of June\u2014the third-highest dollar volume in the U.S. Manhattan topped all U.S. markets at $4.3 billion.<\/p>\n\n\n\n

The Golden City ranked second for office investment in the peer set, outperforming Washington, D.C. ($1.5 billion) and Chicago ($1.2 billion). In contrast, Seattle’s office sales amounted to only $512 million, the lowest total among the gateway markets.<\/p>\n\n\n

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Transamerica Pyramid Center changed hands in the metro’s largest office sale since 2021. Image courtesy of Yardi Matrix<\/em><\/figcaption><\/figure><\/div>\n\n\n

San Francisco properties sold at $609 per square foot on average in June\u2014the highest value nationally. The metro outperformed Manhattan, where assets traded at $590 per square foot. Additionally, the Golden City\u2019s average was more than double the national $195 per square foot.<\/p>\n\n\n\n

Among the other gateway markets, Miami’s prices averaged $404 per square foot, while Seattle\u2019s clocked in at $320 per square foot. Chicago remained the most affordable, with properties trading at $98 per square foot on average.<\/p>\n\n\n\n

In San Francisco’s largest transaction since 2021, Cyprus-based Yoda PLC paid some $725 million for Transamerica Pyramid Center<\/a>, a three-building office complex totaling 758,395 square feet in the city\u2019s Financial District. The purchase price also included $34 million allocated for a final settlement with seller SHVO.<\/p>\n\n\n\n

The second-largest deal, amounting to $125 million, closed in March and involved the 345,595-square-foot tower at 123 Mission St. Madison Capital acquired the Class A property from JUUL Labs, with the help of a $70 million acquisition note issued by Affinius Capital.<\/p>\n\n\n\n

Pipeline reflects a slower development cycle<\/h2>\n\n\n\n

As of June, San Francisco developers had 1.5 million square feet of overall space underway across nine projects, marking 0.7 percent of the existing inventory.<\/p>\n\n\n\n

When looking at competitive office space, the Golden City had 594,544 square feet in its pipeline. The amount represented 0.4 percent of stock, on par with the national figure.<\/p>\n\n\n\n