Q2 2021 San Francisco Occupiers Guide
As San Francisco officially reopened on June 15, asking rates in the office market have continued to decrease 3.2% quarter-over-quarter, whereas vacancy rates have continued to increase from 7.5% in Q2 2020 to 18.0% in Q2 2021. Net absorption remains negative with an additional 336.1 KSF of negative absorption in the quarter.
The largest office tenant in the country joined the list of tenants implementing the hybrid work model, the US Government. Other notable tenants implementing the hybrid work model include Uber, Google, Salesforce, and Facebook. We expect herd mentality to follow suit as the largest tenants in the market start returning to the office place on a part-time basis.
Notably, AirBnB listed their HQ (295.0 KSF) in Showplace Square for sublease despite having a record year in 2020. According to the company’s first quarter earnings report, they recorded $113 million in losses specifically due to leases no longer deemed necessary as they look to reorganize the business and its priorities as it relates to its office needs.