The document provides an update on the SOMA office market in San Francisco for the second quarter of 2012, noting that leasing activity remained strong with rents rising for the 11th consecutive quarter and vacancy declining. While availability in SOMA makes up 64% of the total available space in the Bay Area, technology companies accounted for nine of the top ten deals this quarter, further restricting available creative space. Rents in SOMA have increased 82% from trough to peak but are still more economical than other nearby markets like Palo Alto and Mountain View.

1. Elizabeth Hart
SOMA Office Market
ehart@ccareynkf.com
Update – 2nd Quarter 2012
415.513.2170
Availability Market Statistics
Total Inventory Availability Net Total Vacancy Class A Class B Asking
(sf) (%) Absorption (sf) (sf) Asking Rents Rent
SOMA 10,599,624 15.6% 72,931 SOMA 1,319,281 $55.00 $46.00
San 81,651,420 13.3% 260,482 San 6,630,135 $45.71 $41.88
Francisco Francisco
SOMA Historical Vacancy vs. Asking Rates
Leasing Activity Trends
Leasing activity remained strong as San Francisco continued to be one of the top performing real
estate markets in the country. Rents rose for the 11th consecutive quarter to $45.71 and vacancy
declined to 8.1%. Building renovations and planned construction continue to add supply to the
market to meet the strong 5.2 million square feet of demand currently touring for space. Within San
Francisco, a majority of the availability falls within the north and south financial districts, while
only 20% of space available is located in Soma. Nine of the ten top deals completed this quarter
were transacted b technology companies, continuing the trend of technology growth steering the
d by h l i i i h d f h l h i h
market and further constricting the availability of creative open spaces which command market
premiums.
Even with a trough to peak 32% increase in asking rents in San Francisco and a 82% increase in
Soma, San Francisco continues to be economical in comparison to other competitive Bay Area
Markets.
Markets Downtown Palo Alto rents are currently 89% higher than Soma while Mountain View
Soma,
rents are 41% higher. 76% of the available Bay Area space close to Caltrain is in San Francisco. The
lack of supply in other downtown markets and high demand leads to significant in migration of
Silicon Valley companies into San Francisco, due to our increased options for growth, greater
supply of creative product and lower priced space with close proximity to major transportation.

2. Elizabeth Hart
SOMA Office Market
ehart@ccareynkf.com
Update – 2nd Quarter 2012
415.513.2170
Bay Area Q2 2012 Monthly Rates Square Feet Available by
Bay Area Submarket
1,262,627
8%
2,001,770
, ,
12%
SOMA
San Mateo
1,732,027
Redwood City
10%
Palo Alto
10,599,624 Mountain View
1,027,142
64%
6%
Square Feet Available by
San Francisco Submarket
1,319,281 North Financial District
20%
*Rates are Fully Serviced South Financial District
2,364,769
235,821
235 821 36%
North
N h
Trend Watch 3% Waterfront/Jackson Sq.
Van Ness/Civic Center
834,158
 Continued in migration from Silicon 13% Union Square
Valley and beyond as San Francisco 403,742 SOMA
6%
continues to become a center of 1,472,364
22%
%
innovation and stays a more
economical alternative to Silicon Top Deals of Q2 2012
Valley's prime markets 888 Brannan Street – 170,000
 Increased supply hitting the market SF
now that rents can justify landlord's 1 Market Street – 108,000 SF
rehabilitation of buildings or new
development 140 New Montgomery Street –
98,400 SF