Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SAN FRANCISCO-A recent report released by Brian Topley of Starboard Commercial Real Estate indicates that the commercial real estate market is finally showing signs of stabilization. Vacancy rates for the Financial District office space have been stable for 4 consecutive weeks at 8%, he says, and average rents for the area are stable at about $35 per sf annually.

Topley attributes the lack of volume to the distance that was created between tenants and landlords, rather than to a lack of tenants. As tenants began to realize the slip in the market would give them the upper hand and more bargaining power, landlords still weren’t prepared to make deals at market rates.

“In the last month, however, I’ve observed a definite uptick both in the number of tenants seeking space as well as those who are ready to commit to a lease,” says Topley. “Last week, two of my clients became involved in competitive bidding situations for spaces. This comes as a surprise to landlords, who for much of 2001, were lucky to receive any offers on their spaces.”

This gives realtors hope that San Francisco’s commercial real estate market may be heading toward a slow recovery following a huge blow that knocked rates down falling more than 50% in some submarkets. Landlords suffered, real estate transactions decreased, and the market became so bad that rents were drastically reduced.

“Bubbles form and bubbles burst, but recovery is inevitable,” says Topley. “Just when and how fast this recovery occurs is a question that perplexes business managers and landlords alike. Business managers will hold off signing a new lease or renewal until they feel prices are stable. Landlords are concerned about letting their precious real estate go in a distressed market and will wait for the market to stabilize. Stability is the grease that keeps the economic machine running.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?



Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.