San Francisco industrial leasing slows as flex vacancies remain high

Leasing activity in San Francisco’s industrial market lost momentum in the third quarter of 2025, signaling persistent demand challenges across both logistics and flex segments. After peaking in early 2025, quarterly new leasing volume fell to 850,000 square feet, down from 970,000 square feet in Q2 and well below the 1.5 million square feet recorded in Q1. This decline underscores tenant caution amid elevated interest rates, tariff uncertainty and subdued job growth, which have tempered expansion plans across the region.