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Market Report

San Francisco Office Market Report

2024 Investment Forecast

San Francisco’s Office Slide May Settle in 2024,
Setting the Stage for a Recovery Cycle

Amid greater shakeup, new companies show interest. No other U.S. office market has been as profoundly impacted by the COVID-19 pandemic as San Francisco, with vacancy exceeding 30 percent in central areas, including the Financial District. While asking rents have retreated by as much as 40 percent in some cases over the past four years, the discount represents a historic opportunity for companies looking to improve their long-term position in the market. Several corporate law firms are moving into downtown floor plans this year, while OpenAI’s upcoming 486,600-square-foot sublease from Uber represents the most prominent example of the demand potential from the next wave of technology ventures so far. Companies are also doubling down on quality, with Class A offices built between 2010 and 2019 outperforming their older counterparts. Class B/C vacancy in San Francisco’s suburbs is even lower, trending under 10 percent, supported by limited inventory. These positive factors suggest a turning point in the market is approaching.
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