Home / Health / The office vacancies in SF skyrocketed to a record high, surpassing dot-com.

The office vacancies in SF skyrocketed to a record high, surpassing dot-com.

Office rental prices in San Francisco have fallen steadily over the past year, hitting their lowest in the first quarter of 2021.

The price fell 14.8% last quarter, marking the first time in five years that Manhattan’s office rental market is more expensive than San Francisco, according to the first report by the San Francisco Chronicle (SFGATE and San Francisco). The Chronicle belongs to Hearst, but operates independently of each other.)

The SF office had a median rent of $ 75.32 per square foot in the first three months of the year, compared to Manhattan’s $ 75.99 per square foot, according to brokerage CBRE.

In early 2020, the office vacancy rate was around 4%, but has since more than fourfold increased to 19.7% at the end of March 2021, according to CBRE data, Manhattan’s vacancy rate hit 12.5% ​​in the quarter. First of the year

That leaves a total of 16.3 million square feet of space in the city, with more than half the free space of the sublet. There are typically about 1 million square feet of sublet space available on the San Francisco market at any given time. But as the epidemic spreads, companies trapped in leases are trying to recoup some of the losses. With an additional 1.5 million square feet of sublet space added in Q1, it now has a total market of 9.5 million square feet. Subletters account for 45% of all available office space.

“It is too early to know if office rents have passed their lowest point. Overall San Francisco office rents fell 1.5% in Q1 2021, and optimism abounds with the widespread vaccine in April and possibly increased restrictions. In June, if the state achieves certain goals, ”said Lexi Russell, CBRE’s director of research and analysis,“ However, with nearly 26% of the office space available on the market, there are still hurdles to be crossed before rents are reversed. Let’s grow seriously “

SF’s first-quarter vacancy rate was also 19.1% higher than the previous high of the dot-com era. The city also lost its position as the market leader. It dropped from No. 1 to No. 6 in CBRE’s ranking.

Although vaccination efforts are increasing. But offices are slowly starting to reopen in San Francisco, and some are opening up at much smaller offices. In March, Salesforce, the city’s largest private employer, canceled a 325,000-square-foot lease at the unbuilt Parcel F building in San Francisco’s Transbay neighborhood after the company announced in February that it had more employees. Half will continue to work remotely or in Flexible schedule after the epidemic is over There is also a partial office sublet at 350 Mission St.

Other companies that recently listed office space include Yelp, which has 161,876 square feet of office space at 140 New Montgomery St. rented in October 2021, WeWork is closing five city center locations, and Old Navy announced in February: Will shut down Mission Bay offices and moved to the parent company workspace, Gap Inc.

When Twitter identified the 104,850 square feet of building 1 10th St. for its September 2020 sublet, it was one of the first that the social media giant announced early in the outbreak that a work-from-home option. Permanent for employees is available.

Perhaps the most famous example of a scaled back tech company is when Pinterest paid $ 89.5 million to cancel an 88 Bluxome lease, a high-rise building to be built near its existing San Francisco headquarters. company

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