San Francisco, CA Industrial Market Report Q3 2026

Pipeline Shrinks to 0.3% of Stock; Sales Volume Rises 95%

Demand

San Francisco absorbed 225K SF in Q3 2026, against 181K SF in the same quarter last year. Vacancy is 11.4%, 58 bps tighter than Q3 2025. Central/East San Francisco is the tightest submarket at 0.0% vacancy; Central San Francisco leads rent growth at +3.2%. Trailing-12-month absorption of 1.41M SF compares with -1.21M SF a year earlier. Asking rent of $27.70/SF is up 0.7% year over year and within 1% of the Q2 2026 peak of $27.79/SF. Vacancy sits 114 bps below the Q4 2025 peak of 12.5%.

Supply

San Francisco delivered 182K SF in Q3 and 1.00M SF over the trailing twelve months (-25% versus the prior TTM period). Space under construction equals 0.3% of inventory, concentrated in Redwood City at 3.6% of its stock. Annual deliveries peaked at 1.57M SF in 2025. The 319K SF pipeline equals about one quarters of absorption at the trailing pace.

Investment Market

San Francisco recorded $1.0B in sales over the trailing twelve months, +95% against the prior TTM period; Q3 accounted for $106M. The high-water mark in this series is $1.9B in 2021.

San Francisco cap rates average 5.45%, down for 4 straight quarters. Pricing sits at $412/SF. Price per SF is 11% below the Q2 2022 peak of $465/SF.