SAN FRANCISCO (KRON) – San Francisco’s office vacancy rate just hit a new high. It’s the latest example of how the economic situation in the city keeps on crumbling.
According to real estate brokerage firm CBRE, the leading firm that tracks commercial retail space, about one-third of the office space in San Francisco is not being used right now. Experts say it is going to be a long road to recovery for downtown.
CRBE says the average office vacancy rate in San Francisco has climbed post-pandemic.
- 19% in 2021
- 27% in 2022
- 29.4% in the first quarter of 2023
- 31.8% in the second quarter of 2023
“The biggest factor is people are not coming to the office. People want to come in when their colleagues are there, or what is the point of coming to the office to sit on Zoom meetings all day?” said CBRE Director Colin Yasukochi.
Yasukochi says most companies favor the hybrid work model, and enticing workers into the city five days a week is challenging.
“The more recent and systemic problems we are having around homelessness, crime, transportation and safety have been a further inhibiting thing to keep people from the office,” he said.
With far fewer people coming in, the companies with office space have the option to upgrade and save money for large leases.
“Buildings with nice views and higher quality amenities are doing better. Some lower-quality buildings are the ones that have the most vacancies,” he said.
With recent tech layoffs, inflation and economic uncertainty, CBRE predicts the vacancy rate will tick up a few more percentage points this year and then level off.
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There are some different solutions, such as finding ways to convert office spaces into housing or education centers. Also, the increasing interest and development of AI could cause another boom in tech here in the Bay Area. That is a sector to watch for taking over office space.
from KRON4 https://ift.tt/YHjePOL
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