San Fran is in a DOOM LOOP. It has been estimated that in 2025, 40% of the cities restaurants will close. The office vacancy rate is 36%, major streets are closed to car use.
“The numbers — with vacancies up 0.1 percentage points to 36.6% — follow the heartening totals of the last quarter. The end of 2024 marked the first time in nearly five years that net absorption in The City was positive, meaning more space was leased than vacated.
So far this year, San Francisco has vacated slightly more than 181,000 square feet more than it has leased, according to CBRE’s preliminary numbers.
The data is not a surprise, because while many rejoiced at the year-end turn of events, Colin Yasukochi, executive director of CBRE’s Tech Insights Center, and other experts predicted that vacancy numbers could fluctuate as The City’s office-market recovery gains momentum.
Yasukochi said in a prepared statement Tuesday, in fact, that the “San Francisco office market showed new signs of stabilizing,” sure to be welcome news for many following a period of years in which San Francisco’s office market has been weighed down by the rise of remote work following the COVID-19 pandemic and layoffs in the tech industry, among other factors.
Stabilizing? That is a high rate—not good for the long term prospects of the city, already facing a one billion deficit. Nice headline, not real.
SF recovery signs persist as office vacancies rise again
By Patrick Hoge, SF Examiner , 3/18/25 https://www.sfexaminer.com/news/the-city/sf-office-vacancies-rise-slightly-amid-signs-of-a-recovery/article_4b3a9f12-0455-11f0-800f-bf5911b0217b.html
San Francisco’s office vacancy rate has risen slightly so far in the first quarter of 2025, but leasing activity is nevertheless on pace to exceed the total signed last year, according to preliminary data from the real-estate giant CBRE.
The numbers — with vacancies up 0.1 percentage points to 36.6% — follow the heartening totals of the last quarter. The end of 2024 marked the first time in nearly five years that net absorption in The City was positive, meaning more space was leased than vacated.
So far this year, San Francisco has vacated slightly more than 181,000 square feet more than it has leased, according to CBRE’s preliminary numbers.
The data is not a surprise, because while many rejoiced at the year-end turn of events, Colin Yasukochi, executive director of CBRE’s Tech Insights Center, and other experts predicted that vacancy numbers could fluctuate as The City’s office-market recovery gains momentum.
Yasukochi said in a prepared statement Tuesday, in fact, that the “San Francisco office market showed new signs of stabilizing,” sure to be welcome news for many following a period of years in which San Francisco’s office market has been weighed down by the rise of remote work following the COVID-19 pandemic and layoffs in the tech industry, among other factors.
Yasukochi cited various statistics, including that vacancy declined in each of the past three quarters in the central business district downtown, falling to 33.8% from 34.8% in the second quarter of last year.
The 2.2 million square feet of office space leased in the first quarter is less than the 2.5 million square feet in the fourth quarter of 2024, but 50% higher than the first quarter of that year, Yasukochi said. That means the year-end total could exceed the 8 million square feet leased in all of 2024.
Data Yasukochi provided also showed the amount of space available for lease — which includes vacant space and already leased space that is being marketed for leasing — was actually down to 38.7% from the fourth quarter, when it was 39.1%.
The amount of space available for sublease in particular was down to 7.1 million square feet in the first quarter from 7.9 million in the fourth quarter, and 8.9 million square feet in the first quarter last year.
Companies, meanwhile, are looking for about 5 million square feet of space, which is lower than in previous quarters. But about 1.1 million of that is for new growth or expansion, the highest level of new growth since the pandemic, including for some 30 AI companies seeking 1 million square feet. The City’s burgeoning artificial-intelligence sector is increasingly a bright spot of the local economy.
The biggest new lease listed was Databricks’ 150,000 square-foot deal at One Sansome Street, where the company plans to double its staff in two years as it strives to serve the data storage and analysis needs of AI technology providers.
Other big leases included a 600,000 square-foot renewal by Google at Hills Plaza bordering the Embarcadero, a nearly 125,000 square-foot renewal and expansion lease at 555 California St. signed by the investment firm Dodge & Cox, and a more than 122,000 square-foot lease in the Transamerica Pyramid signed by global law firm Morgan Lewis, which plans to relocate from its existing office space at nearby One Market in early 2026.
Close the streets to restaurants. Walk off some of the fat instead. Fewer restaurants, longer walks, loose more fat!