San Francisco’s office market is gaining momentum as AI and technology companies drive more leasing activity and demand for high-quality space. The market has already recorded 12.1 million square feet of leasing through Q3 2026, putting it on pace for one of its strongest years in decades, according to a new report from Savills.
AI Companies Keep Taking Office Space
San Francisco recorded 3.9 million square feet of leasing in Q3, a 77% increase from the same quarter last year. AI and technology companies continued to account for a significant share of demand, while growing companies favored furnished, move-in-ready offices that can support expansion.
The market has now surpassed the 8.1 million square feet leased through the first three quarters of 2025.
Premium Offices Are Getting More Expensive
As demand strengthens, rents are rising. Average asking rents reached $70.31 per square foot in Q3, up 5.1% from a year earlier. Class A rents climbed to $76.13 per square foot.
The increase comes as tenants compete for a smaller pool of high-quality, ready-to-use offices, even though San Francisco still has a large amount of vacant space overall.
Large Tenants Are Starting To Absorb Excess Space
Overall office availability fell to 27.2%, down from a year earlier. At the same time, more tenants are looking for offices of 100,000 square feet or more, which could remove sizable blocks of space from the market if those requirements become leases.
The combination of stronger leasing and growing large-space requirements could continue to reduce the amount of excess office inventory in San Francisco.
