Q3 2021 San Francisco Occupiers Guide
General market trends remain depressed, with little change from the previous quarter. Vacancy rates remain at 18.3%, a negligible 0.3% increase over the prior quarter. Overall asking rates remained nearly flat, averaging $76.70 per square foot. Net absorption remained negative with 301.3K SF of negative absorption over the quarter despite large sublease move-ins from Benchling and Amplitude.
Companies are beginning to switch to hybrid work models with a focus on workplace redesign. As a result, short-term bridge leases have seen an uptick in activity. While many companies are considering trimming down on office space to cut costs and embrace a hybrid work model, “casual collisions” are still essential for creativity. Tenants still need attractive spaces to encourage employees to come into the office where these collisions can occur, but simply working from desks in the office is no longer the highest priority.