- San Francisco office leasing hit 3.4M SF in Q1 2025—the highest quarterly volume in 10 years—driven by major tech renewals and expansions.
- Availability dropped 100 basis points to 35.6% as demand from top-tier tenants fuels a recovery in prime submarkets.
- Google, JPMorgan Chase, Lyft, and Databricks were among the top tenants, accounting for several of the quarter’s largest deals.
- Despite leasing momentum, financial strain persists for owners, with lender-led sales and write-downs reshaping ownership dynamics.
According to a new report from Savills, San Francisco’s struggling office sector got a shot of adrenaline in Q1 2025 with 3.4M SF of leasing activity—marking the highest quarterly volume in a decade, as reported by Globe St.
Leading The Charge
Google led the momentum, signing two major leases: a 430,000 SF renewal and expansion at 345 Spear Street, and a 274,000 SF renewal at 215 Fremont Street.
Other notable deals included:
Databricks: 150,000 SF relocation to 1 Sansome;
JPMorgan Chase: 280,000 SF renewal and expansion at 580 Mission;
Lyft: 163,000 SF renewal at 185 Berry Street;
Tenants Flock to Class A Space
Availability fell to 35.6%, continuing a trend of recovery as tenants increasingly prioritize quality space in prime areas. The Financial District—especially its southern portion—is commanding the highest average rents in the city, exceeding $72 PSF.
Return-to-office momentum and positive hiring plans are fueling optimism. A recent KPMG survey of San Francisco-based execs found that 75% plan to expand their office footprints in the city, and 66% expect to increase headcount in the next 12 months.
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Distress Lingers for Office Owners
Even as leasing picks up, property owners continue to navigate financial headwinds. Paramount Group has now written down three major San Francisco office investments from 2019 to zero—55 Second Street, Market Center, and 111 Sutter.
Lenders are stepping in. Last week, Newmark was tapped to market a $187.5M loan on the KPMG Building at 55 Second Street, with the loan expected to trade at a steep discount.
Outlook
San Francisco’s office market may be turning a corner, but the recovery is split—driven by demand for high-end space while distressed assets face continued scrutiny. With interest rates still elevated and lenders active, expect more repositioning and recapitalizations in the months ahead.
