Intelligence

Regional Summaries

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San Francisco, CA

Apartment
Rents increased at a double-digit pace in 2015 in the 143,900-unit market-rate, investment grade San Francisco/West Bay apartment market. The fourth quarter 2015 vacancy rate is 4.1%, according to Reis, up 40 basis points during the year but unchanged for the quarter alone. Rents spiked in 2015, with the average asking rent up 10.5% to $2,556 per month and the average effective rent up 10.7% to $2,491 per month. The fourth quarter increase was 0.9% by both measures. VIEW APARTMENT LISTINGS >
Industrial
The West Bay 31.8-million-square-foot warehouse/distribution space segment of the industrial market and the 9.6-million-square-foot Flex/R&D segment have seen little development here for some time. Reis reports a 7.4% vacancy rate for West Bay warehouse/distribution space in the fourth quarter of 2015, down 30 basis points over the year but up 10 during the fourth quarter. Rents gains are limited despite low availability, perhaps because high rents have pushed the limit of ability to pay. For West Bay warehouse/distribution space, the fourth quarter 2015 average asking rent was $8.78 psf, with the average effective rent up at $8.23 psf. The 2015 increases were 1.4% asking and 1.6% effective for warehouse/distribution with the fourth quarter increases at 0.8% asking and 0.9% effective. The Flex/R&D vacancy rate is just 4.5%, down 80 basis points over the year and 20 during the quarter. San Francisco’s Flex/R&D rents were $14.52 psf asking and $13.48 psf effective at year-end 2015. The 2015 increases were 1.2% and 1.4% for Flex/R&D with the fourth quarter increases 0.7% by both measures. VIEW INDUSTRIAL LISTINGS >
Office
If net absorption may be added to new construction as a measure of activity, then 2015 was the most active year since 2000 in the 93.25-million-square-foot San Francisco/West Bay general purpose, multi-tenant office market. Reis reports a 10.3% vacancy rate for the fourth quarter of 2015, down 140 basis points over the year and 40 during the quarter. San Francisco’s office rent gains were strong in 2015, but down slightly from 2014. The average asking rent was up 5.7% to $49.50 psf, and the average effective rent increased 6.0% to $41.41 psf for the year. The fourth quarter increase was 1.4% by both measures. VIEW OFFICE LISTINGS >
Retail
The 9.8-million-square-foot West Bay community-neighborhood shopping center market has a fourth quarter 2015 vacancy rate of 3.1%, down 50 basis points over the year and 20 during the fourth quarter. San Francisco’s community-neighborhood shopping center rents are, as one might expect, quite high. At year-end 2015, the average asking rent was $35.54 psf, and the average effective rent was $32.24 psf. The fourth quarter, however, saw a 0.1% rent decrease by both measures. VIEW RETAIL LISTINGS >

Source: Data provided by Reis, inc.

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