Market Pulse: San Francisco, October 2019

Welcome to the NAI Northern California’s “Market Pulse” feature. We checked the pulse of the San Francisco commercial real estate market to discover the ups and downs of the office, industrial, retail, and multifamily markets.  Each market has four dimensions: current inventory, under construction, 12-month net absorption, and vacancy rate.

Check out our October 2019 San Francisco Market Pulse infographic. If a dimension is on the rise, the pulse goes above the baseline; if it’s on the decline or negative, the pulse will dip below the baseline.

This month, the San Francisco office market’s inventory is still at 176 million sq. ft., with 6 million additional sq. ft. under construction. This figure is up significantly from last month but is expected to decline. Twelve-month net absorption stands at 3.1 million sq. ft. of office space, which is also way up from last month. The vacancy rate is finally on the decline, standing at 5.9%.

For the industrial market, 95 million sq. ft. of space is in the inventory (the same as last month), but this number is expected to rise as the 1 million sq. ft. of industrial space under construction begins to reach completion. The amount of space under construction is expected to continue to rise as well, though it’s down slightly from last month. The 12-month net absorption rate is at 109,000 sq. ft., way down from September, and the vacancy rate is at 3.9% (also trending upward).

There are 82 million sq. ft. of retail space available in San Francisco, which is the same as last month. However, this figure is expected to drop. More is coming, with about 654,000 sq. ft. under construction (the same as last month), and the 12-month absorption rate is at 53,000 sq. ft., which is much lower than in September. Vacancy rates are up from last month but are expected to decline, at 2.7%.

The multifamily market is slowly growing, with up to 167,000 units available in the inventory. Construction is on the upswing here, both from last month and in future projections, at 6,900 units. The 12-month net absorption rate is down slightly at 1,700 units. The vacancy rate is 4.3%, which is higher than last month, but is projected to drop.

For more detailed updates or to find out how San Francisco’s submarkets are doing, contact one of our advisors. Whether you’re interested in officeindustrialretail, or multifamily properties, we can help.