For institutional fund strategies, Transbay carries the strongest investor flag in San Francisco, with prime yields around 6.5%.

  • Trophy submarket (Transbay) carries the strongest investor flag.
  • Prime yield: 6.5%.
  • Core funds buy income; value-add buys repositioning of secondary stock.
  • Cap-rate spread between trophy and secondary has widened post-2022.

San Francisco office fund strategy and flag

For institutional fund strategies, Transbay carries the strongest investor flag in San Francisco, with prime yields around 6.5%.

TL;DR

  • Trophy submarket (Transbay) carries the strongest investor flag.
  • Prime yield: 6.5%.
  • Core funds buy income; value-add buys repositioning of secondary stock.
  • Cap-rate spread between trophy and secondary has widened post-2022.

Where core funds buy

Core capital concentrates in trophy stock with long-WAULT income. In San Francisco, that's Transbay and assets like Salesforce Tower, 181 Fremont.

Where value-add looks

Value-add capital looks at secondary Class A and convertible Class B with repositioning angle. The trophy/secondary cap-rate spread has widened post-2022, which has reopened the value-add basis for repositioning plays.

Key facts

citySan Francisco
countryUnited States
regionAmericas
classARentLocal78 USD/sqft/yr
classARentUsd$78/sqft/yr
vacancy31.5%
typicalLeaseYears7
typicalRentFreeMonths22
submarkets6
primeYieldPct6.5%
primeYield6.5%
trophyAnchorTransbay

Frequently asked questions

Where do core funds buy in San Francisco?
Trophy submarket — Transbay — and the most defensible long-WAULT assets within it.

Editorial provenance

Reviewed by Miriam Hollander — Lead market analyst. Last updated 2026-04-15. See our methodology and editorial standards.

Primary sources for this page

Full sources index · Submit a correction

Related topics