San Francisco’s tech boom has one key distinction

Hugh Scott has followed San Francisco’s real estate markets since the turn of the century. Walking down Market Street on Thursday afternoon, he considered the recent cycles of high and lows that give the city its Gold Rush ethos.

“This is the biggest wave this city will see in terms of investment and growth in tech by a multiple of 3x,” Scott said over the phone.

He is one of a handful of vice chairs for JLL, and represents tenants ranging from venture capital firms to tech startups. And while it might seem obvious that no two San Francisco booms are alike, Scott said one of the sharper distinctions between the current cycle and mid-aughts or pre-pandemic peak goes back to an industry fundamental: Location. He notes that many of the major companies headlining this next evolution, such as OpenAI, Anthropic and Perplexity, are headquartered in San Francisco, no longer confined to Silicon Valley.

That kind of presence has a gravitational pull on startups.

To-date in 2025, 83 artificial intelligence companies have leased nearly 1 million square feet of office space, according to JLL’s Q3 reporting. Across all industries year-over-year, the brokerage reported 9.3 million square feet of office leasing activity in San Francisco, nearing pre-pandemic levels..

Yet, the city’s office vacancy rate still hovers above 35%, and Scott said many of the negotiated leases with AI startups are short-term commitments of 30-36 months. A three-year lease doesn’t bring the kind of stability as a decade, but the flexibility is critical to ensuring San Francisco remains a tech incubator, in Scott’s telling.

“I think we shoot ourselves in the foot when we ask tech startups to sign a seven-to-10-year lease,” Scott said. However, he acknowledged that the market could eventually swing back toward favoring the landlords. As the market gets tighter, he said, “the terms will get longer, rents get higher. But the landlords who draw a hard line now are those who won’t get good activity.”

Swift’s troubles cross the Bay Bridge

Not all Bay Area office landlords are reaping the rewards of the latest boom, as more trouble appears to be afoot for San Francisco-based Swift Real Estate Partners.

Earlier this month, Wells Fargo Bank began shopping around a distressed $102 million loan tied to a three-property portfolio owned by affiliates of Swift. The portfolio included a sprawling office plaza in Walnut Creek. Then news broke that Swift had stopped making payments on a 2015 loan for the Newhall Building at 260 California St, which housed the firm’s San Francisco headquarters. The building had recently lost major tenants, and decreased in value by 60% since Swift purchased it in 2015 for $32.2 million.

Swift was in the news again this week, after the San Francisco Business Times reported that China Construction Bank was shopping around a $59 million loan taken out by Swift in 2019 to purchase a 10-story office building at 1333 Broadway St., in Oakland. The buyer who purchases the debt could also take ownership of the building, which is more than 74 percent leased and hosts a Walgreens and a Delta Dental.

Representatives of Swift Real Estate Partners did not return The Real Deal’s request for comment.

Gone Fishering

And while San Francisco’s office market ascends, Atherton’s ritzy housing market has dropped. Well, relatively speaking in the national context of the wealthy enclave club. With a median home sale price of $8.3 million in 2025, the Silicon Valley enclave’s 94027 zip code is no longer the nation’s most expensive. The crown now rests on Fisher Island, in Miami-Dade County, where the median home sold for $9.5

Despite a drop in the rankings, Atherton’s housing market has continued to grow, notching a 5 percent increase in year-over-year home sale value. Just last week, tech venture capitalist John Jarve, of Menlo Ventures, listed his family’s Atherton home for sale. The five-bedroom colonial-style house sits on 2.5 acres in the Lindenwood neighborhood. The listing agent, Charlene Cogan of Christie’s, said the asking price “was outside the box for Lindenwood,” an area in east Atherton where the most expensive homes often fetch below $20 million.