San Francisco's multifamily sector is on a strong path in recovery, according to a market report from Colliers.
Even with interest rates still elevated, the city appears to be attracting more multifamily investment with larger buildings. In the first half, 40 properties with at least 10 units completed a sale, which is nearly double from the 23 posted in the same period in 2024. Two dozen of the transactions occurred in District 8N (16) and District 5 (9).
"This rise suggests a growing demand for larger buildings, as investors look for opportunities with more scale and long-term potential," Colliers said.
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"Although this portion of the market remains selective, the increased volume signals renewed interest and stronger investor engagement."
The top sale by number of units involved Russian Hill, which went for $500,577 per unit.
That came as the 10-year treasury averaged 4.29 percent in the second quarter. Even though that's 16 basis points lower than in the 12 months prior, it's still well above the 1.92 percent average recorded in 2019.
Additionally, vacancy is falling in San Francisco, with the 2025 first half averaging 5.10 percent, down 110 basis points year-over-year. According to Colliers, professionally managed buildings are seeing the lowest vacancies, which benefit "from operational efficiency, tenant retention strategies, and a strong reputation among renters." The Marina and Pacific Heights neighborhoods averaged the lowest rates, each at 3.2 percent and down from their 5.1 percent levels 12 months prior.
And Colliers said that "rents are rising in tandem," with several parts of San Francisco getting even more expensive versus pre-pandemic levels. Based on anecdotal data from the CRE firm, tenants are signing leases that are between 15 and 20 percent higher than a few years ago.
Additionally, buildings are getting rented out faster, and property managers are offering fewer concessions. These signs point to the multifamily landscape in San Francisco shifting to a seller's market, according to Colliers.
"While affordability remains a long-term consideration, the current environment suggests a sustained recovery in rental fundamentals — one that’s bringing new energy back into San Francisco’s multifamily market," it concluded.
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Anthony Russo
Anthony Russo has been contributing to GlobeSt. since July 2024. Along with CRE, his financial background expands to capital markets, the economy, and consumer issues. Previously, he has written for CapitalWatch and was a senior reporter for The US Sun.
