Undesirable assets continue to inflate San Francisco vacancy
- After exploring office buildings over 50,000 sf and factoring in asset quality as well as the landlord’s financial status and ability to transact, San Francisco’s desirable office footprint accounts for 66.6% of the city’s overall inventory and sits at a 25.6% total vacancy.
- While desirable buildings are typically of premier quality, highly-amenitized, and well-capitalized, those that do lack amenities but are still priced competitively because of the ownership’s financial position and ability to build out attractive space.
- Undesirable buildings have typically lacked amenitization and are often poorly located, resulting in a prohibitive leasing environment. However, there are newer or higher-quality buildings that may not be able to transact due to loan values being significantly higher than building values and now lack capital. This undesirable subset of the market now carries a 46.3% vacancy and has drastically inflated the city’s overall vacancy figures.
June 13, 2025
