San Francisco Office Market
|Average Asking Rent (Price/SF)||$78.50|
|Vacancy Rate (%)||12.4%|
|Net Absorption (SF)||-1,840,406|
Overall vacancy increased by 210 basis points to 12.4%, a 920-basis-point year-over-year change. Class A vacancy increased by 140 basis points to 10.8%, an 830-basis-point year-over-year change.
San Francisco experienced another large drop in absorption, at negative 1.8 million square feet. This drop brought the 2020 total to negative 7.9 million square feet, surpassing the dot.com era first-year absorption decrease of 7.6 million square feet in 2001. Additionally, availability increased 250 basis points during the fourth quarter of 2020 to 20.2%. Over 60% of the increase in availability during the fourth quarter came from sublease space, which increased to a total of 8.5 million square feet, or 49.1% of the total available space on the market.
Due to uncertainty driven by the pandemic, demand remained anemic in the fourth quarter, and leasing volume dropped again to 336,000 square feet. Overall leasing in 2020 was just 34.0% of the leasing volume in 2019. Leasing activity in 2021 is anticipated to be significantly stronger as tenants prepare for occupancy following widespread distribution of the vaccine.Download San Francisco Office Market Report 4Q20