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San Francisco Landlords Gird for Slowdown as Startup Frenzy Ebbs

  • Office-vacancy rate rises the most since the last recession
  • Pullback by startups, prospect of M&A fuel slowdown concern
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Landlords Brace for Cooling of San Francisco Market

Office landlords are bracing for a cooling of San Francisco’s red-hot market as weaker startup valuations and lower venture-capital funding temper years of runaway growth in the technology-industry hub.

The city’s office-vacancy rate jumped in the second quarter by the most since the last recession, while the amount of space available for sublease almost doubled, according to a report to be released this week by brokerage Cushman & Wakefield Inc. New lease deals have tumbled so far this year.