Consultants tell San Rafael committee office values down countywide while pockets see record lease rates

Consultants presenting commercial real-estate findings told San Rafael’s Economic Development & Housing Subcommittee that market conditions are bifurcated: some submarkets show high lease rates while others have seen significant downturns in office values.

Hayden Angaro and Joe McCullum described national and local trends: office building values have declined in many places (a recent publication was cited showing national decreases), yet submarkets in southern Marin are posting lease rates that approach or exceed pre‑COVID levels. The presenters noted medical-office buildings and senior housing remain strong drivers of sales because such assets can secure financing that general office or market-rate residential projects often cannot in the current cost environment.

"Office buildings have decreased in value nationally around 30%. We're seeing some office buildings here in San Rafael and in Marin that are in contract or have sold for less than half price of what they used to be," one presenter said, while also noting that certain projects near transit and successful retail nodes are commanding high rents.

They highlighted examples of adaptive reuse — fitness centers, co-working spaces and youth training facilities occupying former large retail footprints — and pointed to a number of notable local transactions and redevelopment pipelines that could catalyze further activity if financing and construction costs permit. Presenters also emphasized concentrated property ownership and the uncertainty about demolition plans can suppress private tenants from leasing space.

Council members thanked the presenters and requested additional context about geographic variance in lease rates and the role of medical tenants. Staff and presenters agreed to provide more granular data in future updates.