S.F. 's Record Leasing Year
7.2M SF were leased last year in S.F.--a market record. The 10-year average was only 5.8M SF, according to Cushman & Wakefield. The tech and energy markets are keeping S.F., Boston, Houston, and Denver resilient, says Maria Sicola, head of Americas research for Cushman. Maria says there's a national movement into cities, though it's mostly a core market phenomenon in places like S.F. and Boston, she notes. Expect Silicon Valley’s suburban market to see a construction surge this year, with 3M SF expected for completion.
Overall rental rates averaged $41.74/SF for US CBDs for the year--a 7% increase from 2012. San Francisco, Midtown Manhattan, Midtown South, Fairfield County, DC, Downtown Manhattan, and Boston were the only US CBDs to outpace the national rental rate average. S.F.'s CBD had the third highest average asking rate ($55.90), up $3.69 from 2012. (Midtown NYC was No. 1, at $69.52.) S.F.'s CBD boasted the No. 2 lowest national vacancy rate of 9.12%.