PwC Locks In 200,000 SQFT at 405 Howard in San Francisco Through 2040
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 75th San Francisco story tracked on the wire in September 2026. All San Francisco coverage →
- Disclosed office deal value tracked in September 2026: $9.1B across 42 reported transactions. All Office coverage →
Computed from Real Estate Trail’s own tracked coverage
PwC extended its 405 Howard St. lease eight years early, betting that today’s tight trophy-office vacancy and thin construction pipeline will only push San Francisco rents higher by the time its original term was set…
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