- The City of San Francisco signed the largest lease in the city last quarter, expanding its footprint at 1455 Market Street to 225,883 SF.
- Walmart topped the Silicon Valley market with over 338K SF leased across two Sunnyvale buildings.
- Overall Q2 leasing activity in San Francisco surpassed the five-year quarterly average, even as return-to-office rates remain below the national norm.
Public Sector Steps Up
In a surprising twist, the biggest office lease in San Francisco last quarter came not from tech giants or startups — but from the city government itself, reports The Real Deal. San Francisco expanded its offices at 1455 Market Street to nearly 226K SF in Q2 2025, up from 157K SF the year prior. The move is part of a cost-cutting strategy to consolidate city agencies under one roof.
Several municipal departments, including the Human Services Agency, Department of the Environment, and the Mayor’s Office of Disability, are part of the expanded footprint. The San Francisco County Transportation Authority also occupies space in the building.
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Tech Firms Still Active
LinkedIn followed as the second-largest lease in San Francisco, renewing its 156,672 SF space at 222 2nd Street. Coinbase came next with a 150,671 SF lease at 1090 Doctor Maya Angelou Lane. AI startup Glean also entered the top 10 list with its expansion to 634 2nd Street from Palo Alto.
Silicon Valley Snapshot
In the South Bay, Walmart led the pack, renewing its Sunnyvale lease for 204,837 SF and adding another 133,470 SF next door. Altogether, the retail giant leased over 338K SF in the region last quarter.
Meanwhile, cloud security firm Zscaler locked in the largest single transaction of the quarter — a 301,163 SF sublease in Santa Clara across two buildings on Great America Parkway.
Demand Rebounds — Cautiously
According to Savills, San Francisco’s Q2 leasing activity exceeded the five-year quarterly average of 1.4M SF. While overall activity dipped slightly from Q1, the report noted ongoing portfolio reshuffling and a “wait-and-see” approach from many firms as they adapt to changing space needs.
Why It Matters
These moves signal a quiet but measurable shift in office demand across the Bay Area. While the broader tech industry remains cautious, both government agencies and select corporate tenants are taking advantage of softened markets and favorable lease terms to secure long-term space.
What’s Next
Expect more consolidation deals and strategic expansions in the second half of the year, especially as firms seek flexible lease structures and developers continue to adapt to a hybrid-first future.
