Q2 2023 San Francisco Office Occupier's Guide

Falling asking rates and rising vacancy rates are a result of continued softening tenant demand for office space.  The total vacancy rate jumped from 24.5% to 26.3% quarter-over-quarter, largely due to landlords having more space available for lease.  Average asking rates dropped slightly from last quarter, sliding from $72.09/SF to $71.96/SF.

On a positive note, more tenants are on the lookout for space, up quarter-over-quarter from 4.4M SF to 4.7M SF.  This growth was fueled by tenants looking for space in the 20-40K SF range, expanding from 929K SF to 1.2M SF quarter-over-quarter.  Tech companies and legal firms signed most of the leases in this size range, with 465K SF and 325K SF respectively.