Q3 2025 San Francisco Multifamily Report

The San Francisco multifamily market continued its recovery trajectory through the third quarter of 2025, supported by improving fundamentals and strengthening investor confidence.

Key market indicators reflect positive momentum:

• Sales velocity remained stable, with approximately 50% of listed properties going under contract during the quarter.

• Effective rents posted continued growth quarter-over-quarter. • Vacancy declined further to 4.7%, the lowest level recorded since Q1 2019.

• Cap rates continued to compress, with the citywide average now at 5.85%. Prime neighborhoods such as Marina and Pacific Heights achieved a marketlow average of 4.85%.

First hand, LL CRE observed heightened competition for well-located assets, with multiple offers and “best-and-final” rounds becoming increasingly common.

Looking ahead, LL CRE maintains a constructive outlook for the San Francisco multifamily sector and anticipates slow, but steady sustainable improvement in transaction velocity and pricing through the coming quarters.