2026 State of San Francisco Office Leasing
San Francisco's office market has turned a corner, and AI companies are leading the charge. If you're a founder thinking about getting your first real office or expanding your footprint, the market is moving faster than you might expect, and the deals going to AI companies right now are reshaping what's available, at what price, and in what condition.
The team at Newmark SF helped us with the data for this piece, which educates founders on how to think about office leasing.
Here's what we're seeing on the ground, and how to think about your next move.
Snapshot Q1 2026: This isn't a blip — it's a structural shift.
A few headline facts worth understanding before you start touring:
AI and tech demand is the dominant force. AI and tech companies account for approximately 4.8 million square feet of active demand in San Francisco right now, representing about 53% of all active tenants in the market.
Plug-and-play is winning. Around 60% of AI and tech tenants seeking fewer than 20,000 square feet are prioritizing turnkey, furnished spaces. Founders want to move fast. If a space is ready to go, it gets leased first.
Competition is picking up — and rents are following. As demand improves, landlords are seeing longer lease terms and upward pressure on rents. The city-wide average for Class A space is approximately $78 per square foot annually, though where you land depends heavily on views, condition, neighborhood, and building class.
How Much Space Do You Actually Need?
This is where most founders get it wrong. The instinct is to either underestimate (and end up cramped in six months) or overestimate (and pay for empty desks). A simple framework:
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Benching layout (open floor plan, 20% hard-walled rooms): ~150 RSF per person
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Cubicle layout (still mostly open, some private space): ~175 RSF per person
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Private office-heavy layout (50% offices and community space): ~225 RSF per person
For a team of 25, that translates to roughly 3,750 to 5,625 rentable square feet depending on how you work.
SF Office Space Calculator — by Newmark
Estimate your size and rent rate
Step 1 — How much space do you need?
Enter your current headcount and how you plan to use the space. This determines your recommended square footage based on industry-standard density benchmarks.
Step 2 — What's your rate?
Four factors move your rent meaningfully above or below the $78/SF citywide Class A baseline. Select the options that best match the space you're targeting.
Your estimate
Space needed
3,750
RSF
Est. annual rent / RSF
$117
per SF / year
Est. monthly cost
$36,563
per month
Base Class A rate $78/SF × views × condition × neighborhood × building class = $117.00/SF
Estimates based on March 2026 citywide Class A averages. Actual lease terms vary. Contact a broker for a full market assessment.
Ready to find the right space?
Bill Benton at Newmark can walk you through current availability and negotiate on your behalf.
What Drives Your Rent Rate
The $78/SF Class A average is just a starting point. Four factors move that number significantly:
Views. Unobstructed Bay views can push rent 50% above market ($117/SF). No views typically lands 10% below ($70/SF). City views hold at baseline.
Condition. A nice, furnished plug-and-play space commands a 25% premium over baseline. An unfurnished but well-built space adds 20%. Tired second-generation space comes in 10% below — but factor in TI costs if you're going that route.
Neighborhood. The Presidio carries a 30% premium. Mission Bay and Potrero Hill run about 10% above FiDi baseline. SoMa sits 5% below. Civic Center is meaningfully cheaper at roughly half the FiDi rate — worth considering for back-office or non-client-facing teams.
Building class. Class B space runs about 20% below Class A on rate, though the trade-off is typically in amenities and building quality.
What This Means If You're a Founder Searching Now
A few practical takeaways:
Move on furnished space quickly. With 60% of sub-20K SF demand chasing plug-and-play, the best turnkey options are moving fast. If you see something great, waiting to get a second opinion often means losing it.
Consider sublet from a known tenant. Several of the deals above are subleases from companies like Dropbox and Meta — often at below-market rates with high-quality buildouts already in place. This is one of the best ways to get quality space at a discount right now.
Size for where you'll be in 18 months, not today. With demand tightening, re-entering the market in a year will be harder. Think about your growth trajectory before signing.
Get a broker who knows the off-market deals. The Ramp deal at 235 2nd was never officially listed. Institutional relationships matter in a tight market.
The Bottom Line
San Francisco's office market is not what it was in 2022 or 2023. AI companies are absorbing significant square footage, quality product is getting leased, and rents are moving up. Founders who want good space at reasonable rates have a narrowing window.
If you're a Sierra portfolio company working through this decision, reach out — we're happy to connect you with the right resources and brokers who understand the current market.