San Francisco Office Market Report
Despite Concerns Spurred by Health Crisis, San Francisco Office Market Will Recover
Short-term headwinds challenge office market. San Francisco is facing a temporary confluence of soft demand and increasing supply. The emergence of variants of COVID-19 has pushed reopening plans for several local employers into next year, which will keep many office buildings sparsely occupied through the end of the year. The return of anchor tech companies will precede smaller firms resuming in-person operations early next year. Still, some major San Francisco employers are not expected to occupy as much space as they did prior to the health crisis. Salesforce, for example, has backed out of a lease at 550 Howard St. and is sub-leasing hundreds of thousands of square feet. Pinterest paid $90 million to terminate its lease for 490,000 square feet and Twitter is subleasing 100,000 square feet. Overall, it will take several quarters for the supply overhang to be eroded.