SF office market recovery slower than other metros

San Francisco (iStock / illustration by Ilya Hourie for The Real Deal)

Workers are returning to work in San Francisco more slowly than in Los Angeles and Austin.

Some 29% of offices were occupied in mid-March, down from 10% during the omicron surge, the San Francisco Chronicle reported, citing security firm Kastle. That’s less than nine metropolitan areas tracked by the company, including 38% in Los Angeles and 58% in the Texas capital.

While ridership on the Bay Area’s rapid transit system is growing, it’s still at 28% of its pre-pandemic level, compared to 55% in New York City.

“It looks like a turning point, but it’s not to be expected to be a sharp rebound,” Colin Yasukochi of CBRE’s Tech Insights Center told the paper. “The door has closed. Now the door is open but people are not rushing.

More than 20 companies with offices in the region have pledged to lay off at least part of their workforce by March 7. San Francisco’s largest employer, Salesforce, brought back 1,000 workers last week.

The city is also on a public relations tear, running a program it has dubbed BloomSF to highlight area destinations to boost downtown activity.

The data suggests that the office landscape will not return to pre-pandemic days. A Bay Area Council survey found that while 70% of some 200 employers planned to bring workers back to the office, only 15% expected them to be in the office five days a week.

The office vacancy rate in San Francisco was 19.9% ​​in the last quarter of 2021, according to SocketSite.combelow the pandemic peak of 20.5% in the third quarter of last year, but well above 5.7% at the end of 2019.

“In the battle for the future of work, the forces of the hybrid were completely dominant” and “routed” the proponents of the five-day-a-week, Stanford professor Nicholas Bloom told the newspaper.

[San Francisco Chronicle] —Gabriel Poblete

Jose C. Birney