“This has created new confidence that San Francisco 'is back,’ and offers very attractive options for companies to start, grow, and succeed,” he said.

There has been a great “reset” of pricing on the investment side. Starting in 2022, many Class A properties are trading at values as low as 25% of their 2019 prices, according to TRI Commercial/CORFAC International.

“These new owners are much better positioned to transact and secure or retain tenants than those still burdened by large loans,” Del Beccaro said. “This trend is expected to continue for some time, as many properties remain affected.”

A flight to quality-driven leasing activity in the Class A and A+ sector has driven rental rates close to 2019 levels. Tenants are taking this opportunity to upgrade to higher-quality buildings to appease and retain/attract the talent they need. Amenities are on the rise as buildings compete for tenants in the market.

This comes as The Wall Street Journal reported last week that national office vacancy was 19%, according to CBRE, and office supply is on pace to contract this year for the first time in 25 years, due to demolitions and conversions.

All commercial property types, but especially office properties, have shown decreased leasing activity in 2025 due to the stated economic uncertainty in the San Francisco Bay Area, where the number of transactions per month is down by over 50% compared to 2014, according to TRI Commercial/CORFAC International.

Concierge Services as a ‘Silver Bullet’

Owners are rethinking their approach to leasing and often incorporating a “concierge” approach to increase activity. While San Francisco reported an overall vacancy of 35%, the rate in the top building in the city has been reported to be in the 7% range, with solid competition for spaces.

“This won’t be the silver bullet that will change conditions all by itself,” Del Beccaro said. “Still, announcements by large employers calling employees back into the office on a more frequent basis will generate increased foot traffic, retail and hospitality activity, and public transportation ridership, subsequently leading to more tax revenue."

“A tightening job market will accelerate compliance with mandates, as many Bay Area employees are being compensated at a significantly higher scale than what is available in the remote jobs market.”

Concessions are Rising

In San Francisco, 101 California is a highly sought-after Class A trophy address for businesses. The recent concessions made by the landlord to lease space to two prominent law firms in the last three months of 2025, compared to the same period in 2019, include doubling the free rent from 6 months to 11 to 12 months.

The other market concession prevalent today is an increase in the amount of tenant improvements from approximately $100 per square foot to $225 per square foot, more than doubling what was also a factor in these two leases, Del Beccaro said.

“Ask rental rates are roughly the same per required bank lending loan terms, so most concessions are in the form of free rent and extra tenant improvements,” Markus Shayeb, senior vice president, San Francisco managing director at TRI Commercial/CORFAC International, told GlobeSt.com.

“This amount of free rent reduces the effective rental rate by anywhere from 10% to 18%. Office buildings that have loans due, or cannot make these kinds of concessions and have a high debt load, are the ones being foreclosed on.”

Office leasing brokers are being offered $3 per square foot on seven-year lease terms, compared to $2 per square foot in 2019. Some sublease commissions can be as high as $5 per square foot.

Commission bonuses have risen because there are many more spaces available to lease vs tenants in the marketplace,” Shayeb said.

An Uptick in Touring

Tour activity has increased on upper floors in Walnut Creek, East Bay and San Francisco for professional services, which includes law and accounting firms,” Shayeb said.

“Ironically, they are also shrinking their footprint by relocating where support staff work from home in affordable housing areas outside of downtowns. At the same time, senior management and high producers lease the space.”

Tools for Humanity, a cryptocurrency startup co-founded by OpenAI CEO Sam Altman, leased the 600 Townsend East building in the city's Showplace Square area. The deal, confirmed by several people with knowledge of the agreement, will expand the company's real estate footprint from 10,000 square feet to over 87,400 square feet, according to CoStar.