San Francisco's office sector faces sluggish investment with only $50M in sales through February 2026, even as average prices remain high at $1,088 per square foot.
The San Francisco office market continues to grapple with uneven fundamentals as of February 2026, characterized by limited development and a cooling investment environment. Construction activity remains modest, with 1.4 million square feet currently underway across seven projects, representing 0.7 percent of existing inventory. Despite the slow pace of new development, the metro maintains high asking rents, averaging $62.54 per square foot, and holds the second-highest vacancy rate in the nation at 24.2 percent.
Investment activity has significantly decelerated, totaling just $50 million in volume during the first two months of 2026. This slowdown follows a year of notable trades, including Pacific Gas and Electric Co.'s $906 million acquisition of 300 Lakeside Drive in Oakland in 2025. Recent activity includes Moran Capital's $44 million purchase of the 40,442-square-foot office building at 240 Stockton St., which traded at a 45 percent discount from its 2016 sale price.
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