Recovery Stalled As Return To Office Delayed
The San Francisco office market took a step backward in the first quarter of 2022 after showing signs of improvement in the second half of 2021, likely due to the winter surge in Omicron that delayed many companies’ return-to-office plans until Spring along with some companies rightsizing and occupying less space. Market vacancy increased to 18.3 percent this quarter, up 210 basis points quarter-over-quarter which coincided with negative 1,508,710 square feet of net absorption. That said, there are green shoots of optimism in record high office using jobs, fairly robust tenant touring activity, and recent record levels of venture capital funding in San Francisco, all of which drive office demand.