Brex and Cognition Trade 41,000 SQFT of Starter Space for 380,000 SQFT in SOMA, Testing San Francisco’s Startup Pipeline
Why this matters
Office continues to trade in two distinct markets: trophy assets in walkable submarkets that are leasing at or near record rents, and commodity Class B and C buildings where the basis is still resetting. Underwriting on the latter has moved toward replacement-cost-minus, with credit underwriting now leaning on tenant covenant and remaining lease term rather than mark-to-market expectations. San Francisco continues to clear office at the deepest discounts to 2019 basis seen in the cycle, while multifamily fundamentals have stabilized and life sciences in the Peninsula remains active. For LP-positioned capital, the read-through is that the bifurcation is now a structural feature of the sector, not a cycle to wait out.
Editorial analysis · Real Estate Trail Editorial
On the RET wire
- The 93rd San Francisco story tracked on the wire in October 2026. All San Francisco coverage →
- Disclosed office deal value tracked in October 2026: $5.8B across 24 reported transactions. All Office coverage →
Computed from Real Estate Trail’s own tracked coverage
As fast-growing AI and tech companies jump from 16,000- and 25,000-square-foot suites into full SOMA buildings, CBRE's Q3 2026 San Francisco office report shows nearly half of the city's 8.4 million square feet of ten…
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