Q4 2024 San Francisco Sublease State of the Market
Sublease asking rates increased QoQ, highlighting a noticeable divide in pricing trends. Sublessors who recently signed subleases on a portion of their space are raising their asking rents on the remainder of their listed space. While Sublessors with space on the market for an extended period are either maintaining or lowering rates to attract subtenants.
Sublease availability continues to decline, dropping 23.0% YoY. With 1.3M SF of sublease space set to expire in 2025, and an additional 1.2M in 2026, this trend is expected to continue. Tenants looking to capitalize on prime sublease opportunities, which were more readily available 12-18 months ago, may have missed their window of opportunity.
In 2025, sublease availability in the highest quality buildings will decline. Notably, Trophy and Class A buildings account for 38.8% of the sublease space set to expire. While some firms will list new space for sublease, the trend of fewer new space additions is expected to continue. The only significant large blocks added in 2024 were 259K SF and 460K SF by Charles Schwab and “X”, respectively.
Sublease availability continues to decline, dropping 23.0% YoY. With 1.3M SF of sublease space set to expire in 2025, and an additional 1.2M in 2026, this trend is expected to continue. Tenants looking to capitalize on prime sublease opportunities, which were more readily available 12-18 months ago, may have missed their window of opportunity.
In 2025, sublease availability in the highest quality buildings will decline. Notably, Trophy and Class A buildings account for 38.8% of the sublease space set to expire. While some firms will list new space for sublease, the trend of fewer new space additions is expected to continue. The only significant large blocks added in 2024 were 259K SF and 460K SF by Charles Schwab and “X”, respectively.