Lease
What to strike from a San Francisco office lease
12 clauses, what each says, and what to ask for instead. The vacancy rate is doing the negotiating for you.
Figures compiled 25 August 2026. Every figure names the house that published it.
The market
Cushman & Wakefield, second quarter, 2026
Kidder Mathews, second quarter, 2026
Cushman & Wakefield, second quarter, 2026
Kidder Mathews, second quarter, 2026
Cushman & Wakefield, second quarter, 2026
Kidder Mathews, second quarter, 2026
Two houses measure the same city and print different numbers. Both are above, named, because a single average would read as more certain than it is.
The clauses
In the order they cost you money.
Personal guaranty
You are personally liable for the rent for the whole term, whatever happens to the company.
Ask for
A good-guy guaranty in its place. It releases you once you give notice, pay through the surrender date, and leave the space broom-clean. Notice periods run 30 to 180 days; ask for the short end.
The figures in this one are general leasing practice. San Francisco publishes none of its own.
Security deposit
A cash deposit sized to what the landlord thinks of your credit, held for the full term.
Ask for
A burn-down schedule that cuts the deposit at named anniversaries after on-time payment. A letter of credit instead of cash keeps the working capital in the company.
Operating expenses and the base year
You pay your share of any increase in building costs over the base year. The landlord may gross those costs up to what they would be in a full building.
Ask for
The gross-up method disclosed, and an audit right over the statements. Capital works, leasing commissions, structural repair, and the landlord's own fines excluded. A cap on the annual increase.
Rent escalation
Base rent rises a fixed percentage every year, or tracks an index.
Ask for
A fixed percentage rather than an index, so it can be budgeted. Negotiate the percentage down on a first short term. Three percent is the usual ask in general practice.
The figures in this one are general leasing practice. San Francisco publishes none of its own.
Holdover
Stay a day past expiry without a new agreement and the rent doubles.
Ask for
A step, not a jump: 125 to 150 percent for the first 30 to 60 days, then the higher figure. Moves slip, and a slipped move should not cost double.
The figures in this one are general leasing practice. San Francisco publishes none of its own.
Assignment and subletting
You cannot assign or sublet without consent, and consent is at the landlord's discretion.
Ask for
Consent not to be unreasonably withheld, conditioned, or delayed. Permitted transfers to affiliates, acquirers, and merger successors, with no consent at all, and no landlord right to recapture. Your share of any sublease profit, after your unamortised fit-out, commissions, and costs.
Restoration and surrender
At the end you remove every alteration and cable, at your cost. The space goes back as you found it.
Ask for
Broom-clean, as-is surrender for anything the landlord approved. If a removal list is required, have it written when the work is approved. It should not be decided against you at the end.
Early termination
Nothing. The absence is the clause. A five-year term is a five-year liability.
Ask for
One termination right, after year two or year three, for a stated fee. The fee is usually the unamortised fit-out, free rent, and commissions, plus a few months of rent. It turns a fixed liability into a bounded one.
Sublease, if that is what you are signing
Your rights are the master tenant's rights. You have no relationship with the landlord, and no renewal beyond the master term.
Ask for
The whole master lease, read before signing. The landlord's written consent and recognition, so the sublease survives if the master tenant does not.
Tenant improvement allowance and free rent
What the landlord contributes to the fit-out, and how many months you do not pay.
Ask for
Both, in the letter of intent, before anything else is agreed. Bay Area allowances are reported at $40–$135 per square foot. One free month per year of term is a common rule of thumb.
The figures in this one are general leasing practice. San Francisco publishes none of its own.
Legal fees and the broker
Ordinarily the landlord pays the leasing commission, including your own broker's share. Some documents then bill you for the landlord's legal fees on consents.
Ask for
The commission confirmed in writing in the letter of intent. A dollar cap on any landlord legal fee you are asked to reimburse.
The disclosure the city owes you
For a space of 7,500 square feet or less, the landlord must hand you an access information notice at signing.
Ask for
Ask for it if it does not arrive, and read it. It tells you what accessibility condition the space is actually in, which is a cost, not a formality.
Only here
Four things a tenant in another city never meets.
Commercial Rents Tax
San Francisco taxes rent received from commercial subleasing at 3.5 percent. It reaches you the moment you sublet part of your own space. The exemption is $2,325,000 in city gross receipts, so read this beside your right to sublet.
San Francisco Treasurer and Tax Collector, current, threshold set by Proposition M, November 2024
Accessible Business Entrance
An office is a public accommodation here, and each tenant files its own compliance checklist. It must be prepared by a certified access specialist or a licensed design professional. If the entrance is not compliant, that work needs its own permit.
SF.gov, current, Ordinance 22-25, enacted 7 April 2025
Plan review at DBI
In-house plan review for a commercial fit-out is estimated at eight to 16 weeks. A complex project can run six to 12 months from application to permit. Dual review by Planning and DBI, and historic review in a landmarked building, are what stretch it.
PermitPlace, citing San Francisco DBI, updated 14 March 2026
Seismic condition
San Francisco is high seismic risk, and retrofit is the landlord's structural obligation. The work can still interrupt your occupancy for weeks. Ask for the building's retrofit status in writing before you sign.
No city page states this plainly. Ask the landlord.
Asking rent
Dollars per square foot per year, full service gross, direct space.
As published, blended across classes. Kidder Mathews, second quarter, 2026.
Rent is one line of the bill. The other nine Services are priced by neighbourhood and by team size at San Francisco prices.
Not published
San Francisco does not publish the following, so neither do we. A national average printed as a local one is worse than a blank.
- An average tenant improvement allowance for San Francisco this quarter, in dollars per square foot.
- An average number of free rent months being given in San Francisco this quarter.
- An average lease term being signed, in years.
- A security deposit convention, in months of rent.
- A holdover multiple or a rent escalation percentage published for this city.
- A sublease discount against direct asking rent, as a percentage.
This page states terms and market figures. It is not legal advice, and a lease should be read by a lawyer before signing.
We take it
Lease is the first of the ten Services. Tell us the neighbourhood, the arrival date, and the headcount. The Dossier dates the other nine to your own move.