Rent Gains Remain Solid, Although San Francisco Office Market Shows Signs of Slowing

SAN FRANCISCO, CA — Fundamentals in the San Francisco office market are expected to reach more sustainable levels in 2008, following a year of robust leasing activity, according to a second-quarter Office Research Report by Marcus & Millichap, the nation’s largest real estate investment services firm.

Rent gains will be among the highest in the country, ending the year up nearly 50 percent from 2004.

“Transaction velocity is expected to wane from the levels recorded in 2007, though healthy fundamental growth will still drive investor interest in the metro’s office assets,” says Jeffrey Mishkin, (top right photo) regional manager of the San Francisco office of Marcus & Millichap.

Following are some of the most significant aspects of the San Francisco Office Research Report:

· Payrolls are forecast to increase 1 percent, or by 10,000 jobs, in 2008.
· Developers are projected to complete approximately 1.4 million square feet of competitive office space this year, a 1.6 percent increase.
· Vacancy is predicted to end the year at 9.5 percent.
· Asking rents are forecast to increase 7.7 percent to $43.24 per square foot.
· Effective rents will end the year at $37.16 per square foot, an 8.1 percent rise.

For a copy of the complete San Francisco Office Research Report, as well as reports on other markets nationwide, visit our website at http://www.marcusmillichap.com/.

Press Contact: Stacey Corso,
Communications Department,
(925) 953-1716