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The San Francisco office market continued to make headlines
during the first quarter of 2007.
The prevalent news in the market has not only been investment sale acquisition
prices, but
also the quantity of transactions that have transpired. The result has
been that San Francisco’s
total investment sales volume is on track to hit unprecedented highs. Nearly
$5.5 billion of
investment acquisitions were either placed under contract or completed
during the first quarter,
whereas the total sales volume for 2006 was $4.38 billion.
First quarter marked the 11th consecutive quarter to post positive overall
net absorption. Despite
seemingly sluggish demand, San Francisco tenant expansions absorbed a total
of 371,541
square feet.
Demand for Class A office space in the North Financial District continues
to be strong. As a
result, completed transactions in the submarket achieved an 11.8 percent
increase in average
direct rental rates over the quarter.
Financial Service firms still dominate the City’s tenant composition.
Transactions involving
companies in the Financial Service sector represented 45 percent of the
total office leasing
activity during the first quarter. However, companies categorized as tech-related,
are becoming
increasingly more active in the office market. Transactions involving tech-related
firms represented
15 percent of the total office leasing activity posted over the quarter.
Contact Tove Nilsen at 415.288.7827 for more information.
  Q1 2007 Snapshot.pdf
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