- Office vacancies in San Francisco hit another record in the second quarter, and rent prices fell to their lowest since 2015, according to Cushman & Wakefield.
- San Francisco is benefiting from the artificial intelligence boom, with OpenAI, Anthropic and Scale AI signing big leases in the past year.
- But the post-Covid trend toward hybrid work coupled with mass layoffs across the industry have led to a steady increase in vacancies.
Artificial intelligence has been a big boon for San Francisco real estate. But not enough of one to make up for the broader struggle across the market.
The vacancy rate for San Francisco office space reached a fresh record of 34.5% in the second quarter, according to a report Monday from commercial real estate firm Cushman & Wakefield. That’s up from 33.9% in the first quarter, 28.1% in the same period a year ago and 5% before the pandemic.
Meanwhile, the average asking rent dropped to $68.27 per square foot in the quarter, the lowest since late 2015, down from $72.90 a year earlier and a peak of $84.70 in 2020.
San Francisco is reeling from the twin challenges of bringing people back to the office after the Covid pandemic and a slowdown in the tech market that’s led to mass job cuts across the industry. Tech companies have laid off more than 530,000 employees since the start of 2022, according to the website Layoffs.fyi, with major downsizing at Alphabet
, Meta
, Amazon
, Tesla
, Microsoft
and Salesforce
www.cnbc.com/2024/07/08/san-franciscos-real-estate-slide-continues-as-office-vacancies-peak.html