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Office Vacancy Rate in S.F. Was Holding at a Pandemic High

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It was hit The highest pandemic in the first quarter of 2022 was 21.7%The effective office vacancy rate in San Francisco remains unchanged in the second quarter of this year, equivalent to 18.7 million square feet of vacant office space in the city, with the amount of technically leased but vacant space. It has decreased slightly. According to Cushman & Wakefield data, what was offered as a sublet (decreased from 5.3 million to 5 million square feet) was offset by an increase in the amount of unleased space from 13.4 million to 13.7 million square feet. ..

As a point of comparison, pre-pandemic San Francisco vacancy rates were 5.7%, less than 5 million square feet, and San Francisco vacancy rates averaged close to 12% in the long run.

And once again As outlined at the end of last year:

“Despite the decline in overall vacancy at the end of 2021, the amount of unrented office space in San Francisco was 1.3 million square feet of space provided to Sublet, absolute and relative. It actually increased in both. In the third quarter, it was rented, reused, or returned to the market directly as free space. Also, the total leasing activity was actually the fourth to the third quarter of last year. Returning to the office is delayed due to a quarterly decline and a “lack of large-scale transactions” (yes, The surge in COVID cases makes sense beyond the increase in hospitalizations and deaths), And for negative net absorption, less than 1 million square feet of space was leased, including the sublet. “

In addition, San Francisco’s second-quarter vacancy aggregate included Google’s agreement to sublease 300,000 square feet of space at 510 Townsend, which Salesforce is currently offering for subleasing inside the tower. It did not include 412,000 square feet of space. Located on 50 Fremont Street, including this, San Francisco offices have vacancy rates of over 22%, leaving virtually empty space of over 19 million square feet.

At the same time, estimated active demand for office space in San Francisco exceeded 7 million square feet in the first quarter of 2020 before the pandemic, but slightly exceeded 3 million square feet at the end of last month.Rapid drop from Demand at the end of the first quarter of this year will be close to 5 million square feet..

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