Office space rental rates in San Francisco Q3 2024, by submarket

San Francisco's office rental market showcases significant variation across its submarkets, with Mission Bay commanding the highest rates at 138 U.S. dollars per square foot in the third quarter of 2024. This premium location demanded nearly double the city's average rate, highlighting the stark differences in desirability and demand within the city's commercial real estate landscape.

Economic powerhouse

The San Francisco Bay Area's economic prowess is evident in its impressive economic growth over the past 20 years. The city's strength is fueled by the presence of major technology companies and a thriving startup ecosystem. The region's economic significance extends beyond local boundaries, contributing substantially to California's position as the state with the highest GDP in the country. This economic vitality helps explain the sustained demand for office space across various San Francisco submarkets.

Offices: global context and market trends

In a global context, San Francisco's office rental rates are relatively high but not the most expensive worldwide. In 2024, London, Hong Kong, and New York emerged as the top three most expensive office rental markets globally. Over the past five years, San Francisco has experienced a decline in office rents. This trend aligns with broader shifts in the office real estate sector, influenced by the COVID-19 pandemic and the rise of hybrid work. Despite these challenges, certain San Francisco submarkets like Mission Bay and The Presidio continue to command premium rates, reflecting their enduring appeal to commercial tenants.