San Francisco Absorbs 3.67MM SQFT of Office Space in 2026as Vacancy Falls to 25.3% With No New Supply
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 25th San Francisco story tracked on the wire in November 2026. All San Francisco coverage →
- Disclosed office deal value tracked in November 2026: $4B across 13 reported transactions. All Office coverage →
Computed from Real Estate Trail’s own tracked coverage
San Francisco tenants have absorbed 3.67 million square feet of office space so far in 2026, a pace topped only once in two decades, and because no new buildings have delivered since 2024, almost every square foot is…
External link. Real Estate Trail does not republish source content.
Related coverage — San Francisco · Office
Replit Opens First Asia Office in Tokyo Expanding Global Footprint
Replit deepens partnership with Sumitomo Mitsui Finance and Leasing Company, Limited (SMFL) to bring its platform to enterprises across Asia TOKYO and SAN FRANCISCO, Nov. 4, 2026 /PRNewswire/ -- Replit, the agentic so…
Bezos-Backed Prometheus Said to Take All 180,000 SQFT of Sobrato’s One Harrison on San Francisco’s Waterfront
Jeff Bezos’ heavily funded AI startup Prometheus has reportedly leased every floor of The Sobrato Organization’s freshly renovated One Harrison, the former Gap and Athleta office on San Francisco’s waterfront, a deal…
Arista Networks’ 363,000 SQFT Santa Clara Build Stands as Silicon Valley’s Only Office Project Under Construction
Arista Networks' owner-user office building at 5200 Patrick Henry Drive has become the lone office project rising in Silicon Valley, according to Newmark, a status that says as much about a stalled speculative pipelin…
Silicon Valley Office Splits in Two as CMBS Delinquency Hits 12.16% and a $208.9MM Local Loan Sours
Even as Silicon Valley's office leasing rebound gathers pace, rising loan distress, a 10-year Treasury above 5.2 percent and tighter lending terms are dividing the region's office stock into two markets: long-leased t…
Voters Pass $11.25B Prop. 1 Housing Bond as Housing Trust Silicon Valley Readies Capital for Stalled Projects
California voters approved Proposition 1, authorizing $11.25 billion in state bonds for affordable housing, and Housing Trust Silicon Valley Chief Executive Officer Noni Ramos says the money gives lenders like hers th…
Solbach Locks In Rules for 49-Story, 538-Unit Tower at 501 Brannan in San Francisco’s SoMa, Nearly Halving Affordable Units
City planning records show Solbach Property Group filed four preliminary applications on Oct. 28 for a 49-story, 538-unit tower at 501 Brannan Street, keeping both a condo-and-rental version and an all-apartment versi…