Office availability rates continue to increase as office property valuations decline

At mid-year 2023, the total availability rate in the San Francisco office market increased by another 240 basis points (bps) from 32.7% reported last quarter to yet another all-time high of 35.1%. Led by more high-profile subleases such as Uber who put over 287,000 square feet (sf) on the market in Mission Bay, sublease space has increased yet again to 9.8 million square feet (msf), up from 8.9 msf reported last quarter, as well as up 34% from 7.3 msf reported a year ago. With return to office rates amongst the lowest nationally and occupier concerns about declining quality of life and safety, expect leasing activity to remain low over the short-term, especially as the technology sector continues to right-size after years of growth.

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