Q2 2026 San Francisco Office Occupiers Guide

The San Francisco office market continued to strengthen in the second quarter, evidenced by positive net absorption totaling 1.5M SF, the strongest quarterly performance since 2018. Vacancy declined for the fifth consecutive quarter to 26.5%, down 2.2% quarter-over-quarter (QoQ) and 5.8% year-over-year (YoY). Availability decreased to 29.5%, or 7.6% from the Q4 2023 peak of 37.4%. Asking rents increased for the sixth consecutive quarter with average asking rents climbing to $71.91 psf, representing a YoY increase of 7.3%, or $4.88 psf. Unlike other cities, the reductions in vacancy & availability rates are due to leasing activity and almost no office-to-residential conversions removing inventory from the market.

AI companies continued to drive leasing activity, accounting for five of the eight largest deals this quarter, including two Anthropic leases totaling 344K SF in the So. Financial District and Together.ai’s 148K SF lease in Showplace Square. The City of San Francisco completed a massive 505K SF lease expansion providing a major boost to Mid-Market. With leasing activity rising and return to office policies more widespread, San Francisco office visits increased 8.2% year over year, according to Placer.ai, highlighting the market’s continued improvement.