San Francisco Office Insight Report Q2 2021

San Francisco office market reports

Q2 2021: The tech industry’s lax return to office policies and flexible work from anywhere plans outweigh reopening efforts and higher regional vaccination rates in the Bay Area.

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Despite Bay Area-based companies beginning their workplace reopening efforts and significantly higher vaccination rates across the regional population, the Bay Area office market recovery continues to lag behind the national average. A high concentration of tech firms with flexible return to office plans is a large contributor to the less rapid rate of recovery the Bay area has experience thus far.

Economic conditions

Reopening efforts and higher vaccination rates have allowed the San Francisco unemployment rate to rebound from a high of 13.0 percent to 5.4 percent.


Recovery rate

The overall rate of recovery in the Bay Area (65.7 percent) is comparatively higher than the overall U.S. (49.1 percent).  However, the return of Bay Area office occupiers has lagged other primary markets given the concentration of tech and a lack across the sector of requiring workers back in the office. The rate of recovery across the Bay Area office market is 10.2 percent compared to the U.S. average of 19.2 percent.



Leasing activity

Leasing activity has paused, decreasing by 65-75 percent compared with recent historical averages.



Occupancy losses have totaled almost 6 million sf over the past 18 months as vacancy has risen to 15.4 percent.


9.2m sf

Sublease space

Available sublease space has increased to 9.2 million sf, almost 3x 2019 levels.



Rental rate

Base rents have declined by 4.3 percent since the beginning of 2021 and as concession have increased, net effective rents have dropped by 5.4 percent.

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