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Market Report

San Francisco Retail Market Report

2Q 2022

Improving Health Conditions Pave Way for First Annual Vacancy Compression in Eight Years

Pandemic-era restrictions lifted. During spring 2021, the capacity limits were rescinded on indoor shopping and entertainment venues, which jump started San Francisco's retail recovery. Since then, the metro has recorded four consecutive quarters of positive net absorption, with availability contracting 20 basis points in the first quarter of this year alone. South San Mateo County and the western half of the city of San Francisco have observed the most leasing activity as of late, where local vacancy is at least 250 basis points below the metro average entering April. Additionally, the metro recently dropped its vaccine mandate for indoor restaurants and bars in March. This will likely induce more social gatherings and increase consumer spending, which, in turn, may provide an additional boost to leasing activity in the near- to mid-term.
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