The office vacancy rate represents the percentage of office space available to rent out of the total square footage of office space in San Francisco. It gives us insight into the demand for office space in San Francisco from businesses.
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Data on the dashboard is updated each quarter.
Commercial Real Estate data comes from the Jones Lang LaSalle website.
Why do we track this metric?
San Francisco’s Downtown has historically been a job center for the entire Bay Area. The thousands of offices concentrated there employed hundreds of thousands of workers, from both the city and the surrounding communities. Prior to the pandemic, nearly 470,000 people commuted to San Francisco for work from other places. Those offices and their employees created demand for various businesses, which generated revenue and created jobs.
During the pandemic, most office workers began working from home. This reduced economic activity in our office core and throughout the broader city because fewer people came into San Francisco each day. It placed severe stress on small businesses located Downtown and their employees.
Quarterly office vacancy data helps us understand how much space is available for office-based businesses to locate in San Francisco. It shows us the interest that businesses have in locating in the city. This, in turn, gives us a sense of how many office workers will be in our downtown and therefore, how many customers will support the businesses that rely on them.
In addition, a great deal of San Francisco’s tax revenue is generated by businesses paying taxes. Another large part of the City’s tax revenue is from those who lease commercial property paying Commercial Rent taxes. These revenue streams are reduced when offices remain vacant for an extended period of time.
How do we interpret this metric?
Office vacancy reached historically low levels in 2019. Then, the pandemic created a significant increase in office vacancy rates. From March 2020 to June 2021, office vacancy rates increased from 5% to 20% as offices adopted hybrid and fully remote reporting schedules. This suggests that with fewer employees physically reporting to work, many offices reduced the size of their office or let go of their office space entirely.
By late 2022, the rate remained higher than it had been in decades, but the rate of increase had slowed.