1. Elizabeth Hart
ehart@ccareynkf.com SOMA Office Market
415.513.2170 Update – 3rd Quarter, 2010
SOMA Historical Vacancy versus Asking Rates
Availability
Net $39.00 32.00%
Total Inventory Availability
Asking Rental Rates
Absorption
(sf) (%) $37.00
(sf)
Vacancy Rate
$35.00 27.00%
SOMA 10,463,312 24.36% 433,162
$33.00
SAN FRANCISCO 82,878,820 14.45% 459,426 22.00%
$31.00
$29.00 17.00%
Market Statistics $27.00
Class A
Total Vacancy Class B $25.00 12.00%
Asking
(sf) Asking Rents
Rents
3Q '07
4Q '07
1Q '07
2Q '08
3Q '08
4Q '08
1Q '08
2Q '09
3Q '09
4Q '09
Q '09
Q '10
3Q '10
0
'1
SOMA 2,548,733 $34.00 $30.00
2Q
1
2
SAN FRANCISCO 11,973,126 $35.64 $28.73
Asking Rents Vacancy
Leasing Activity Trends
rd
Soma leasing activity was strong in the 3 quarter with increased transaction velocity in all size ranges. Zynga inked the
largest San Francisco transaction since the end of 2005, by taking 270k sf of space at 650 Townsend. With Zynga’s
predominantly open plan, this equates to room for roughly 2,000+ employees.
Asking rates have increased across brick & timber creative spaces, while commodity spaces with dropped ceilings have
maintained steady asking rates. The delta between asking rates and completed transaction is narrowing. However, there
are still other creative ways to add value to the transaction for tenants beyond the “face rent”.
Of the total availability in Soma, only 24% can be categorized as creative, forcing tenants to weigh location versus space
aesthetics. Space within proximity to Caltrain is very tight, driven not only by organic growth within San Francisco but also
by companies entering the market from other locations that want to take advantage of access to a larger talent pool via easy
public transportation.
From a Bay Area perspective, rents in downtown Palo Alto continue to be robust at a full service average rent of $74.28,
while downtown Mountain View’s average is $51.84. Beyond the amenities and access to talent, one can quickly realize
why many Bay Area companies take a hard look at locating in Soma/San Francisco versus moving to the Silicon Valley.
Significant SOMA Lease Transactions
Tenant Square Feet Type Location
Zynga 270,000 Direct Lease/Growth 650 Townsend
United Business Media 36,620 Direct Lease/Growth 303 Second Street
Cisco Systems 31,891 Direct Lease/Expansion 185 Berry
Outcast Communications 21,568 Direct Lease/Expansion 123 Townsend
650 Townsend, San Francisco, Zynga
Zynga inks the largest SF transaction of this year at 650
Townsend at 270,000 sf. Terms are highly confidential
and have not been distributed.
Submarket Update Q3 2010

2. Elizabeth Hart
ehart@ccareynkf.com SOMA Office Market
415.513.2170 Update – 3rd Quarter, 2010
San Francisco Vacancy by Submarket
14.72%
24.36%
10.53%
185 Berry, San Francisco, Cisco Systems
Cisco continued the expansion of their SF presence by expanding an
additional 31,891 sf for a total footprint of 68,891 sf at China Basin
Landing. 9.61%
11.94%
Q4’10 Forecast
Continued increase in leasing velocity and
increased asking rates as real estate market
continues its recovery. Creative spaces and 19.55%
those within close walking distance of Caltrain
continue to see rate increases at a faster North Financial
velocity than commodity office products and South Financial
those with inferior public transit. The desirable N Waterfront -Jackson Sq
areas of Soma expand further west due to Van Ness - Civic Center
th
Zynga’s large presence at 8 /Townsend. Union Sq
Soma
rd
Large blocks of space like 680 Folsom (400k), 370 3
(373k), and 500 Terry Francois (281k) contribute to Soma
Thank you to clients in Q3 2010:
consisting of 24.36% of the vacancy in San Francisco.
Almost all of Soma’s tenants cannot take advantage of these
vacancies, since the spaces are not divisible or ready for
occupancy. The most desirable spaces are those that cater
to 2-15k tenants and are built out ready for occupancy.
Submarket Update Q3 2010