San Francisco 2023 Q4 Office Report

Office availability rates continue their upswing despite new demand from generative A.I..

At year-end 2023, the total availability rate in the San Francisco office market increased by another 40 basis points (bps) from 36.3% reported last quarter to 36.7% which is a record high. Despite seeing two of the largest tech-related office leases in 2023 with OpenAI taking the Uber sublease in Mission Bay and Anthropic taking the Slack sublease in Financial District South, respectively, leasing activity in Q4 2023 was just over 1.6 million square feet (msf) which was just barely higher than the 5-year quarterly average of 1.5 msf. With return to office rates amongst the lowest nationally and occupier concerns about declining quality of life and safety, expect leasing activity to remain lower over the short-term, especially as the technology sector continues to right-size after years of venture capital-fueled growth.

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