S.F.’s biggest office lease in years comes to troubled Mid-Market area

June 6, 2026 - 08:43

The city of San Francisco has finalized its biggest office lease in over six years, a deal that brings thousands of government workers to the troubled Mid-Market neighborhood. The lease, which covers roughly 290,000 square feet, will consolidate several city agencies into a single building at 1355 Market Street. This marks the largest single office transaction in San Francisco since early 2018, before the pandemic reshaped downtown real estate.

The move is a significant vote of confidence for a district that has become a symbol of the city's post-COVID struggles. Mid-Market, once a hub for tech startups and high-profile companies like Twitter and Uber, has seen a wave of vacancies, retail closures, and persistent issues with drug use and homelessness. The area's foot traffic remains far below pre-pandemic levels, and many office towers sit partially empty.

City officials argue that relocating thousands of employees to the area will inject daily activity and spending into local businesses. The lease also helps address the city's own real estate needs by moving workers out of aging, underutilized buildings. The deal is structured as a 15-year term, with the city paying an estimated $40 per square foot annually, a rate that reflects the current market's deep discounts compared to peak rents.

Critics, however, question whether a government anchor can truly revive a neighborhood that has resisted private investment. Some business owners in the area welcome the news but remain skeptical about safety and cleanliness. The lease is expected to bring roughly 2,000 workers to the building by late 2025, but it does little to solve the broader glut of empty office space across downtown San Francisco, where vacancy rates hover near record highs. For now, the deal offers a rare bright spot in a market that has seen few large-scale commitments.