This document is a market report for the San Francisco commercial real estate market in the second quarter of 2010. It provides statistics on inventory, vacancy rates, absorption rates, and average asking rental rates for different submarkets in San Francisco. Major leasing and investment transactions are also summarized, including lease renewals and expansions by companies like Salesforce.com and Morrison & Foerster. The Financial District submarkets experienced positive net absorption while Downtown South submarkets saw mixed absorption results.

1. 2010 | 2nd Quarter
Market Report
San Francisco
49 Stevenson Street, Suite 1025
San Francisco, CA 94105
(415) 543-9400 phone
www.cmrealty.com
# of Total SF Avail Direct Available Sublease Available Vacancy Rate 2nd Qtr Absorption YTD Absorption
MARKET Inventory
Buildings
Q1 2010 Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2010 Gross Net Gross Net
Financial District
North Financial
123 28,481,463 3,992,777 3,949,058 3,356,561 3,497,221 636,216 451,837 14.02% 13.87% 748,103 43,719 1,249,019 478
District
South Financial
112 24,902,484 3,003,938 3,108,946 2,847,954 2,862,994 155,984 245,952 12.06% 12.48% 352,517 -105,008 730,729 -121,978
District
Totals for Financial District
235 53,383,947 6,996,715 7,058,004 6,204,515 6,360,215 792,200 697,789 13.11% 13.22% 1,100,620 -61,289 1,979,748 -121,500
Downtown South
South of Market 111 6,789,050 1,322,505 1,244,671 1,292,383 1,239,018 30,122 5,653 19.48% 18.33% 66,019 77,834 159,967 52,161
Rincon Hill/South
69 5,113,084 635,936 562,675 567,378 496,167 68,558 66,508 12.44% 11.00% 164,623 73,261 285,712 79,911
Beach
Mission Bay 15 2,558,348 714,840 749,673 714,840 749,673 0 0 27.94% 29.30% 32,190 -34,833 146,903 -37,099
Downtown North
Jackson Square 62 2,232,202 269,461 283,748 266,461 273,014 3,000 10,734 12.07% 12.71% 49,525 -14,287 97,017 1,180
North Waterfront 57 3,691,438 409,801 333,884 368,682 286,636 41,119 47,248 11.10% 9.04% 96,686 75,917 163,026 57,372
Downtown West
Yerba Buena 39 3,607,330 813,301 798,599 686,925 666,278 126,376 132,321 22.55% 22.14% 81,522 14,702 140,843 10,564
Union Square 84 4,730,832 568,800 556,506 549,440 550,773 19,360 5,733 12.02% 11.76% 92,896 12,294 201,544 47,706
Vacancy vs Rent
Totals for SF Central Business District
657 82,106,231 11,731,359 11,587,760 10,650,624 10,621,774 1,080,735 965,986 14.29% 14.11% 1,684,081 143,599 3,174,760 90,295
San Francisco Net Absorption by Submarket Financial District - Class A & B
1st Quarter 2010 to 2nd Quarter 2010 Vacancy and Rental Rates
100,000 14.00% $45.00
$38.64 $37.56$37.60 $37.92
12.00% $35.88 $40.00
Avg. Asking Rent
50,000 $33.00
$35.00
ate %
$29.04$29.19
10.00% $26.92
$26.88 $30.00
Square Feet
$25.56
0
g
Vacancy Ra
8.00% $25.00
F
-50,000 6.00% $20.00
$15.00
4.00%
11.50%
12.84%
12.80%
13.22%
12.90%
12.20%
10.70%
13.11%
-100,000 $10.00
9.50%
9.50%
9.10%
2.00% $5.00
-150,000
North South Rincon 0.00% $0.00
South of Mission Jackson North Yerba Union
Financial Financial Hill/South 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010
Market Bay Square Waterfront Buena Square
District District Beach
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Q1 2010 -90,339 72,113 -1,027 49,330 55,595 3,030 -25,980 2,423 -119,718
Q2 2010 43,719 -105,008 77,834 73,261 -34,833 -14,287 75,917 14,702 12,294 Vacancy Rate Average Asking Rent
SF Quarterly Market Report Q2_2010
Address Submarket Tenant Size (RSF)
One Market, The Landmark Buildings South Financial Salesforce.com (Renewal/expansion) Page 1 260,484
425 Market Street South Financial Morrison & Foerster (Renewal/downsize) 220,000
Lease Transactions
505 Montgomery Street North Financial Latham Wadkins LLP 120,000
455 Mission Bay Blvd. Mission Bay Bayer Healthcare Pharmaceuticals 75,000
100 First Street South Financial Internal Revenue Service, GSA 72,735
555 California Street North Financial Goldman Sachs & Co. (Renewal/downsize) 72,730
44 Montgomery Street North Financial Securities & Exchange Commission 60,000
( l)
Woodruff & Sawyer
50 California Street North Financial 56,000
Ferry Building Embarcadero Conifer Securities 50,000
625 3rd Street SOMA UbiSoft (Renewal) 42,000
101 Montgomery Street North Financial Trust for Public Land 33,000
116 New Montgomery Street South Financial Trulia.com 31,500
1355 Sansome Street North Waterfront Hult International Business School 29,000
75 Hawthorne South Financial Environmental Protection Agency (GSA) 300,000
50 Fremont Street South Financial Deloitte 180,000
TIMs
Multiple Buildings Potrero Hill Zynga 150,000-300,000
795 Folsom Street South Financial Twitter 100,000
Potrero Square & SOMA SOMA Dolby 100,000-280,000
Address Submarket Buyer Size (RSF) Price PSF
303 Second Street South Financial Kilroy Realty Corp. 726,000 $ 326.00
Sales
333 Market Street South Financial Korea Teachers Credit Union 657,115 $ 333.00
255 California Street North Financial Highridge Partners 121,000 $ 250.00
351 California Street North Financial Polidev International 136,791 $ 250.00