San Francisco Is One of Top Three US Office Markets

SAN FRANCISCO-San Francisco is a top-performing office market—followed by New York City and Houston—based on factors including vacancies, job growth and projected rents, according to the National Office Property Index. Rental rates soared during the first quarter, increasing by 7.5% over fourth-quarter 2011, as strong absorption and decreasing vacancies continued to put pressure on rates.

Class-A rental rates across all markets averaged $48.87 per square foot, up from $44.56 in fourth-quarter 2011, according to Colliers International’s first-quarter office report for San Francisco; class-B rates rose from $38.18 to $40.29 during the same time period. Class-A financial-district rental rates rose from $43.56 to $49.65 during that time, while class-B rates in this submarket rose slightly from $36.03 to $36.85.