Q4 2025 San Francisco Office Occupier's Guide
The San Francisco office market showed clear signs of recovery in 2025. Vacancy declined for the second consecutive quarter, while availability fell to 34.2% from a peak of 37.4% in Q3 2024. Asking rents stabilized and began to rise, increasing $0.29 quarter over quarter to $67.50 after bottoming out at $67.02 in Q2 2025. With 579K SF of absorption in the quarter, the market posted 544K SF of positive net absorption for the year, the first year of positive absorption since 2019.
Two words defined 2025: Artificial Intelligence. AI firms led leasing activity, pushing volume above 2024 levels and returning tenant demand to 2019 levels. Supported by record venture capital investment, AI tenants are leasing aggressively, with an emphasis on flexibility and speed to occupancy. Demand remains concentrated in Mission Bay/China Basin, SOMA, and the South Financial District, where tenants can secure move-in-ready, highly amenitized space with large open floor plates that support collaboration and talent attraction.
Two words defined 2025: Artificial Intelligence. AI firms led leasing activity, pushing volume above 2024 levels and returning tenant demand to 2019 levels. Supported by record venture capital investment, AI tenants are leasing aggressively, with an emphasis on flexibility and speed to occupancy. Demand remains concentrated in Mission Bay/China Basin, SOMA, and the South Financial District, where tenants can secure move-in-ready, highly amenitized space with large open floor plates that support collaboration and talent attraction.