- San Francisco showed strong signs of recovery in 2025, with several key indicators pointing towards sustained momentum. The total office vacancy declined year-over-year from 31.8% to 30.5%, while leasing activity surged. San Francisco also led the nation with the largest increase in year-over-year leasing volume at 41.3%, outpacing all other major office markets. Active tenant demand continued to show promise while expanding from 5.5 msf in 2024 to 8.4 msf by year-end 2025.
- San Francisco has historically experienced an average of 1.20 msf/yr of positive net absorption during past periods of recovery, peaking at 3.79 msf in 2018. At a rate of 1.00 msf/yr, the market would not return to a sub-10% vacancy until 2044, while 3.00 msf/yr would accelerate a recovery to 2032.
- With 1.19 msf of positive net absorption in 2025 and 3.10 msf of future positive net demand from tenants in the market, San Francisco could recover by 2036 with 2.00 msf/yr of net absorption, mimicking the years immediately following the Great Recession. This would be fueled by pent-up demand, a growing AI industry and employers continuing to enforce return-to-office policies.
San Francisco’s office market could recover by 2036
Office Market Recovery Chart
