Avison Young brokers predict what the Bay Area office market holds for 2024 and beyond
January 3, 2024
“Smaller and midsized tenants that moved out of San Francisco due to high rents, early-stage growth companies, or companies looking to upgrade their space, now have the opportunity secure the lowest rents within the past 10 years. Many landlords are providing outsized concessions to achieve longer term leases. On the bright side, the flight to quality continues and the best buildings are maintaining high occupancy and strong rents,” said Ross Robinson, Principal and Market Leader for Avison Young’s San Francisco office.
When asked when San Francisco will return to an office vacancy rate of 12%, the overwhelming majority (56%) said it would be by 2029. Nevertheless, they observed that the current high vacancy rate, which is hovering around 38% presents a distinctive opportunity for tenants aiming to establish a presence in one of the world’s most prominent markets.
The majority of Avison Young respondents expect concession packages to be significantly higher in 2024 as landlords compete with limited activity. However, they also see touring activity moving slightly higher next year which will also drive an uptick in leasing velocity.
Some other trends identified in the survey include:
Office Amenities are in and Coworking is Out
Return to Office is Trending
The Pace of Layoffs is Decreasing
The AI Industry is the Top Bay Area Market Driver
About Avison Young
Avison Young creates real economic, social and environmental value as a global real estate advisor, powered by people. As a private company, our clients collaborate with an empowered partner who is invested in their success. Our integrated talent realizes the full potential of real estate by using global intelligence platforms that provide clients with insights and advantage. Together, we can create healthy, productive workplaces for employees, cities that are centers for prosperity for their citizens, and built spaces and places that create a net benefit to the economy, the environment and the community.
Avison Young is a 2023 winner of the Canada's Best Managed Companies Platinum Club designation, having retained its Best Managed designation for 12 consecutive years.