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San Francisco Office Market Research Report Q3 2022

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For every one step forward, the market takes two steps back

MR_SFO_22Q3_OFC_554x350At the end of the third quarter 2022, the San Francisco office market continued to be impacted by the pandemic and subsequent drop in office use. The city closed the third quarter with record high office vacancy after posting significant negative net absorption, following a general trend in tenant rightsizings and downsizings -- citywide -- but particularly in the North and South Financial Districts. As of mid-September, office use data compiled by Kastle Systems showed significant growth in return-to-office figures across major U.S. markets, although the San Francisco metro tracked the lowest rate of growth and remained well below capacity. Until a significant, sustained return-to-office trend emerges in San Francisco, it is expected that vacancy will continue to remain near historic highs. Despite record high vacancy, citywide average asking rents remained relatively flat over the quarter. That said, effective rents ticked down slightly, with the class C segment seeing the most significant drop, reflecting trends in increasing tenant concessions and flight to quality.



San Francisco Office Market Research Report Q3 2022

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Derek Daniels

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Derek is the Research Director for Colliers International covering San Francisco, California. As Research Director, he leads the organizational and strategic development of the Research service offering for the San Francisco office and works closely with the Colliers brokers and leadership to provide market expertise to clients and procure new business opportunities.

Derek has contributed to regional and national reports covering a wide range of topics affecting commercial real estate. He leads the development of thought leadership content in San Francisco, tracking real estate and real estate-adjacent trends at both the market level and individual asset level.

With 17 years of real estate experience in the Bay Area, Derek is an expert across multiple markets including San Francisco and the East Bay, where he covered the office and industrial sectors in Oakland, the Tri-Valley, and Walnut Creek.

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