San Francisco is now the most expensive office market in the nation, surpassing Manhattan for the first time in years, as our latest U.S. office market report shows. Asking rents average $69.14 per square foot in San Francisco, slightly higher than Manhattan’s $68.48. This is mainly due to the high rental rents in the market suburbs like Sand Hill Road. However, the city continues to lead the nation in office vacancies with a 27.7% rate—up 360 basis points year-over-year. 

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Key highlights include: 

  • The average U.S. office listing rate stood at $32.79 per square foot, up 3.3% year-over-year 
  • The national vacancy rate reached 19.4% at the end of October, an increase of 160 basis points year-over-year 
  • High vacancies persist in most office markets, with San Francisco and Austin recording the highest rate nationally at 27.7%, followed by the Bay Area (26.4%), Seattle (25.8%) and Denver (24.6%) 
  • Under-construction office space totaled 60.8 million square feet nationwide, with 8.5 million square feet breaking ground in 2024 and 43.9 million square feet being completed through October 
  • Office sales totaled $29.2 billion through the first 10 months of the year, with assets trading at $177 per square foot 
  • San Francisco became the most expensive office market in the U.S., with asking rents averaging $69.14 per square foot, surpassing Manhattan for the first time in years 
  • Detroit posted the lowest asking rents among leading office markets at $21.46 per square foot and the lowest average sale prices nationwide at $76 per square foot 
  • Boston remained the most active market for office development nationwide, with 10.7 million square feet underway (4.3% of stock), 1.1 million of which broke ground this year 

San Francisco Becomes the Most Expensive Office Market in the U.S.

Vacancy rates continued to surge across Western tech markets. San Francisco continued to lead the nation in office vacancy with a 27.7% rate, up 360 basis points year-over-year. Up next, the market comprising the rest of the Bay Area recorded the second-highest vacancy rate in the West, reaching 26.4%. This marks a 630-basis-point increase year-over-year, the most notable increase among Western markets. At the same time, asking rents in the Bay Area remained in the high teens, averaging $54.20 per square foot, the third-highest across top U.S. office markets.  

Beyond California, Seattle posted the third-highest vacancy rate in the region and the fourth-highest nationally at 25.8%, up 390 basis points over the past year. Denver followed with a 24.6% rate, marking a 260-basis-point increase over the same period.  

San Francisco became the most expensive office market in the U.S., surpassing Manhattan for the first time in years. Asking rents averaged $69.14 per square foot, slightly higher than Manhattan’s $68.48 per square foot. The San Francisco market, as defined in our report, includes the San Francisco Peninsula in the northern part of the Bay Area, extending south all the way down to San Mateo and Menlo Park, part of Silicon Valley. This rental growth is mainly driven by high rates in the market’s suburban areas, such as Sand Hill Road, the most expensive office street in the nation. The priciest office listing nationwide as of October is Sand Hill Commons in Menlo Park, with an average asking rent of $204 per square foot.  

High-Quality Asset Trades at Premium Price in Los Angeles 

Across the U.S., a total of $29.2 billion in office sales have been recorded through the end of October, with properties trading at an average of $177 per square foot. Manhattan led the nation in sales volume, logging $3.3 billion year-to-date, followed by Washington, D.C ($2.5 billion), the Bay Area ($2.1 billion) and Los Angeles ($1.7 billion).  

In October, San Francisco became the priciest market for office investment, with properties trading at an average of $392 per square foot. Miami was next, with an average price of $369 per square foot, followed by Los Angeles with $354 per square foot. However, average sale prices in most office markets have still significantly declined over the last 12 months. 

Tech Markets See Highest Vacancy Rates

The national average full-service equivalent listing rate was $32.79 per square foot in October, according to our latest U.S. office market report, down 10 cents from the month but up 3.3% year-over-year.  

The national vacancy rate was 19.4%, increasing 160 basis points year-over-year. 

Top Listings by Metro Area: October 2024 

Tech markets continued posting some of the highest U.S. office vacancy rates. These markets have been among the most impacted by the shift to remote and hybrid work, given the adaptability of many tech jobs. Adding to these challenges, a wave of tech layoffs beginning in late 2022 extended into 2023, further dampening office demand.  

San Francisco’s vacancy rate sat at 27.7% in October, marking a 360-basis-point increase over the last year. Seattle’s vacancy rate climbed by 390 basis points to 25.8%, while the Bay Area reached 26.4% after an increase of 630 basis points. Although AI firms signing large leases have made headlines recently, the industry’s footprint remains too small to move the office leasing needle at scale.