Opinion: Another (Opportunistic) Look at San Francisco’s Office Vacancy

The Space Place, San Francisco leasing availability
Photo by Chris Leipelt on Unsplash

By Vladimir Bosanac

As San Francisco’s vacancy and availability rates continue to climb into the high 20 percent range, I am struck by one thing: Opportunity!

Today’s market may be one of the best for a company to enter the city and establish a foothold in one of the most active technology hubs in the world. The vacancy and availability will likely subside at some point, albeit in the very distant future—relatively speaking, because what is distant these days—and getting in on the action today in San Francisco may be just what your business needs to create an environment for those who can and will come into the office really special.

A good friend of The Registry, Dan Mihalovich of The Space Place put together a slightly different perspective on the availability of office space in San Francisco, which to me resonates more than a bland figure of 29 percent that most industry reports share. Sure, the numbers are high and Mihalovich’s analysis shows availability in San Francisco pre-pandemic hovering around 10 million square feet, whereas today that figure is around 30 million square feet. That’s what you get with eleven straight quarters of negative absorption, Mihalovich tells me. But, this means vast opportunities for tenants. The market has probably never looked so favorable before.

Here is his analysis of the contiguous blocks of space today compared to two years ago by the size of available space.

Contiguous Block Size (SQFT)August 2022June 2020
5,000 – 9,999620350
10,000 – 19,999432206
20,000 – 29,99915069
30,000 – 39,9995623
40,000 – 49,9994116
50,000 +10547

Could this spark an interest in San Francisco’s office market again? Only time will tell.

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